Category: Regions

Mexico’s BBVA Bancomer has sold $1bn in new 2020 bonds, its first dollar sale in nearly three years. The bank priced at par with a 7.25% coupon to yield at the tight end of 7.25%-7.50% guidance, talk that had been revised from an earlier 7.50% area. The sale drew $4bn in orders, according to banker managing the deal, with nearly half the demand from US investors. Deutsche Bank and Goldman Sachs managed the sale, which came at the end of a US, Asian and European tour. The deal was Bancomer’s first since a $500m 15-year in 2007, according to Dealogic data. The LatAm bank supply shows no sign of stopping, with BancoPanamericano and Interbank set to price subordinated bonds today.

Mexican glass maker Vitro has received a claim for accelerated payment on $216m on its 2013 bonds. After previous demands on its 2012s and 2017s, the Mexican glassmaker now faces acceleration claims on all of the $1.22bn it defaulted on last year. Separately, a New York judge granted Vitro’s derivatives counterparties a summary judgment on the company’s responsibility for losses on derivatives contracts, and ordered a special arbitrator to make a recommendation on the amount. The company says it is analyzing the decision and its options. With respect to both actions, Vitro says it continues to be focused on reaching a consensual restructuring agreement with creditors. At the end of March, Vitro offered bondholders $660m in new 8-year bonds in exchange for $1.5bn in existing debt, and 20 cents for every dollar of Ebitda it generates over a $250m annual threshold – sweetened from a previous offer. There was no timeframe given for holders to accept the offer.

Southern Copper saw jumbo demand for $1.5bn in new 10 and 30-year bonds, which were tightly priced but still traded up. The Grupo Mexico unit operating mainly in Peru was able to bring the yield significantly in from early price talk amid nearly $9bn in orders. The scarce Baa2/BBB/BBB minus miner priced $400m in 2020 bonds at 99.481 with a 5.375% coupon to yield 5.443%, or UST plus 162.5bp, well through 175.0bp-187.5bp talk, which was tightened to 162.5bp-175.0bp. A $1.1bn 2040 tranche came at 99.250 with a 6.750% coupon to yield 6.809%, or UST plus 212.5bp, the tight end of 212.5bp-225bp guidance. The 10 year bonds tightened further late Tuesday, reaching 143bp-146bp, according to traders, with the 30 year hitting 202bp-205bp. “This is a good story, Peru is a good story, and there is some scarcity value,” says an EM portfolio manager based in New York, who participated despite a getting tighter than hoped for spread. He notes the issuer was able to tighten pricing as demand swelled on high-grade participation. Southern’s spread is back of Brazil’s Vale – a more diverse credit but the closest comp – with a 2019 trading to yield around UST plus 112bp, and a 2039 around UST plus 178bp, according to Eric Ollom, head of EM corporate credit research at Jeffries. “At 25-35 basis points wide of Vale, it’s attractive,” Ollom tells LatinFinance, noting it should not trade through Vale. “It makes sense that it would come wide to Vale, which is a very different type of company, though it came close,” says a banker away from the trade. Proceeds from the sale will go to general corporate purposes, including capex. Credit Suisse, Goldman Sachs and Morgan Stanley managed the sale. The miner formerly known as Southern Peru Copper had brought its last previous deal, a $400m 2035, in 2006.

Telefonica plans to sell up to MXP6bn in bonds on Mexico’s domestic market, according to S&P, which assigns a AAA national scale rating. The Telefonica Finanzas Mexico unit wants 2014 and 2020 notes to refinance maturing debt. The deal would be the telecom’s first issuance in Mexico since 2006, when it raised MXP4.5bn in floating-rate bonds that come due this September. BBVA Bancomer is the bank listed on Telefonica’s MXP24bn shelf filed last year.

Southern Copper is heard looking for a yield of UST plus 175.0bp-187.5bp for a new 10-year bond, which could come as soon as today, according to investors. The Grupo Mexico unit is also heard looking for about 225.0bp-237.5bp yield on a 30-year bond to be issued at the same time. The benchmark sized BBB/Baa2 deal is spotted at up to $1.5bn total by ratings agencies, and was to finish roadshowing Monday. Southern Copper is expected to pitch to both high-grade and EM buyers. It aims to market itself as a high grade comp to global miners. Credit Suisse, Goldman Sachs and Morgan Stanley are managing the sale, the issuer’s first international bond since 2006. Southern Copper is domiciled in the US, owned by a Mexican company, and operates primarily in Peru.