Empresas Publicas de Medellin (EPM) has raised COP1.25trn ($679m) in 2021 global peso bonds, as investors continue to show a favorable view on the currency. The Baa3/BBB minus utility priced at 99.179 with an 8.375% coupon to yield 8.500%, in line with 8.500% area guidance. Investors placed about $1bn in orders for the deal, according to bankers on the sale, which follows a $402m equivalent raise from peer Emgesa last week. EPM was upsized from an expected $500m equivalent. “We found a lot of appetite from investors wanting more pesos, after the sovereign [COP bond last year],” Oscar Herrera, EPM’s CFO tells LatinFinance. He adds that the issue is the largest ever global-local currency denominated sale from an EM corporate issuer. The 8.5% yield compares to 6.8% on the global 2021 sovereign TES bonds, and 7.9% on the 2019 local TES, Herrera says. “It’s not every country where you can get local currency denominated debt at a premium to the local [government] curve,” says a New York-based EM portfolio manager. He sees room for additional tightening versus the TES curve. Herrera says the bond priced through EPM’s dollar swap curve. EPM plans to use proceeds for general corporate purposes. BAML and Barclays managed the sale, EPM’s first cross-border deal since a $500m 10-year in 2009. DCM bankers say there is demand for more corporate global COP issuers, though they will need name recognition and the ability to do size.
Category: Regions
Mexico Holds Rate Steady
As expected, Mexico’s central bank held its policy rate steady Friday at 4.5% and left little in the statement to change analysts’ forecasts. Nomura says Mexico will continue to keep its rate at 4.5% throughout the year. “Monetary policy in neutral gear and there are no signs of a tightening cycle in the horizon,” says Goldman. Meanwhile, UBS says Mexico may begin hiking rates as early as October.
BAML Advising Drummond on Sale
BAML is advising Drummond on the sale of its Colombian assets, according to a source familiar with the situation. The US-based mining company is heard to be talking with Xstrata, a Swiss commodities trader, according to a banker away from the deal. The assets could be worth $8bn, according to press reports.
Second Mexican REIT Filed
Construtora Planigrupo has registered to sell a Fibra, or Mexican REIT, becoming the second entity to do so. The developer and operator of commercial centers plans to create a trust to acquire and develop new projects, according to regulatory documents. It has set a target of MXP2.75bn for the transaction, to be managed by Ixe, with Goldman Sachs as structuring agent. It does not indicate timing for the transaction. US real estate-focused private equity investor Walton Street is co-investing $28m, according to the documents.
America Movil Targets Loan Refi
America Movil, the Mexican mobile phone company, is heard looking for a loan for between $1bn and $2bn. The loan is to refinance existing loans that are maturing, and for additional financing. Market participants expect the loan to have a 3-year maturity. The deal is said not to be event driven. The cash-rich telecom is rumored to be surveying Eastern Europe for possible acquisitions.
Santander Mexico to Issue MXP5bn in Bonds
Santander Mexico will issue up to MXP5bn in 3-year bonds, tentatively scheduled to price January 28, according to a banker on the deal. Santander and Banamex are joint leads. The proceeds will be used to expand the banks lending portfolio. The bonds are rated AAA on a national scale.
Braskem Hits Road
Braskem is set to meet investors next week. The petrochemical producer plans to begin meetings in Europe on Wednesday, January 26, according to investors. Credit Agricole, Deutsche, and Espirito Santo are managing the roadshow. The Ba1/BB+ issuer had been thought last year to be a candidate for both Euro and BRL-denominated issuance. While the global BRL trend that took hold late last year has yet to be revived in 2011, Banco do Brasil has demonstrated this month strong European demand for Brazilian exposure. Braskem’s last bond was a $450m 7.375% perpetual NC5, sold in September through Deutsche Bank, HSBC and Itau.
ICA Seeks Perp
Mexico’s ICA plans to meet investors next week ahead of a dollar denominated perpetual bond issue, according to investors. The builder and engineer is planning a two-team roadshow. Monday through Thursday, one team will meet investors in Singapore, Hong Kong, Switzerland and London. A second team will begin Tuesday in Boston and New York. BAML, MS and Santander are managing the deal. ICA has been an infrequent user of the bond markets in recent years. Its last cross-border bond deal was a $150m 5-year in 1996, according to Dealogic data.
Emgesa Clinches Global COP
Colombia’s Emgesa has raised COP740bn ($402m) from the sale of global peso bonds. The new 2021 represents the issuer’s cross border debut. “It’s a cheap price for the quality of the company, but the concern is liquidity,” says a New York EM portfolio manager. The BBB minus bond priced at par with an 8.75% coupon, to yield at the tight end of 8.75%-9.00% guidance. The bond was heard 2x subscribed, according to investors. Citi and Deutsche managed the sale, payable in USD. Proceeds are expected to help finance construction of the $840m 400MW Quimbo hydroelectric plant and repay debt, says Fitch. The deal is the first global COP since the sovereign raised $1.3bn equivalent in 2 sales last year. Fellow Colombian utility EPM is expected soon with a bond of its own, possibly also in COP.
Colombia and Peru Merge Bourses
The Colombian and Peru stock markets have agreed to merge, creating a combined entity with $45.8m in revenue and $22.4m in Ebitda. Shareholders in Bolsa de Valores de Lima (BVL) will receive a 36% stake in the newly combined entity, while shareholders of Bolsa de Valores de Colombia (BVC), will hold the rest. BVL has a $195m market cap while BVC has a $434m market cap. BVL was advised by APOYO Consultoria, while BVC was advised by Estrategias Corporativas in Colombia and LXG Capital in Peru. The merger is separate from announced plans for the 2 exchanges to integrate operations with the Chilean bourse in order to create a super-regional bolsa.