Colombia’s TGI raised $750m in 2017 dollar-denominated notes at par to yield 9.50% Wednesday, marking the first significant cross-border corporate bond in LatAm since July. The amount was $150m short of the planned $900m size, although demand for the bonds is heard to have reached $2bn. Also, a planned tranche of pesos, floated in the 12% area, was scrapped entirely. One investor who bought says the issuer chose to retool the BB rated offer to maintain a strong aftermarket bid and keep pricing in line with 9.50% area guidance. Grey market bids had the notes up as high as 3/4 of a point over re-offer and the bonds ended the day close to100.50, according to buyside traders. “It was a fairly priced deal and in this market, the fact it traded it up means it was a success,” says a portfolio manager who participated. ABN AMRO had sole books. Sister company EEB is likely to follow with its planned deal of at least $300m.
Category: Regions
Peru’s BCP Sells $160m in Global Soles
Banco de Crédito del Peru has priced a $160m 2022 NC10 sol-denominated subordinated bond issue at par to yield 7.17%, or 85bp over the sovereign. Morgan Stanley was the lead on the Baa3/BB+ issue.
Food Producer Exits Mexican Sugar Operation
Tate & Lyle has sold its 49% stake in Mexican cane sugar producer Grupo Industrial Azucarero de Occidente to ED&F Man for $93m. The food producer aims to trim its worldwide sugar interests to just Britain, Portugal and Vietnam, and will use proceeds to reduce Group debt. Occidente operates three mills in Mexico and is 51% owned by the Saenz family.
Guidance Emerges on KUO Bond
Mexico’s Grupo KUO, a maker of auto parts, plastics and canned foods formerly known as DESC, is expected to price Wednesday a $200m 2017 offering. Guidance is for a 10% coupon, following a US and European road show last week. Citi and Credit Suisse are joint bookrunners on the offering, rated BB- by Fitch and S&P.
Peru Leaves Rate Unchanged at 5.0%
Peru has left the reference interest rate unchanged at 5.0% in its monthly monetary policy meeting held last week, following an inflation hike it views as transitory. “It is more likely than not (probability of more than 50%) that the central bank will raise the reference interest rate by another 25bp (to 5.25%) before year-end,” says Goldman Sachs.
IMF Approves $111m Nicaragua Loan
The IMF has approved a loan worth about $111.3m under the Poverty Reduction and Growth Facility (PRGF) to support Nicaragua’s economic program. It will result in an immediate disbursement of approximately $18.5m. PRGF loans carry an annual interest rate of 0.5% percent and are repayable over 10 years with a 5.5–year grace period on principal payments. “Nicaragua has made important strides over the last years. Macroeconomic stability has been strengthened, vulnerabilities reduced, and poverty-reduction spending expanded, while important progress has been made with structural reforms,” says IMF deputy MD Murilo Portugal.
CentAm Debt Performs Strongly in September: Bear Stearns
Central America and Caribbean sovereign debt performed very strongly in September, says Bear Stearns. The shop’s BSCAX index of those regions returned 2.44% last month, slightly more than the 2.14% rise in global sovereign debt. “Belize, El Salvador and Panama outperformed the market, while Costa Rica, Grenada, T&T, Barbados and Bahamas underperformed,” says Bear. In mid-yielding credits, the shop says the Dominican Republic 2011 bonds look cheap to their CentAm peers. “These bonds have widened relative to Guatemala ’11s, for example, but also versus El Salvador and Costa Rica. Moreover, the DR ’11s are two years shorter in average life,” says Bear.
Banks Close Panamanian Power Plant Bond financing
WestLB and Banco General have closed on a $175m local public bond issue supporting the conversion of the Bahia Las Minas plant owned by Suez Tractebel and the Panamanian government. The transaction, consisting of a $100m 2020 tranche and a $75m 2022 tranche, is thought to be the first of its kind in the Panamanian bond market and the first of its type under New York law. It was done this way to access the liquidity of the local market while still allowing the participation of foreign lenders, according to bankers on the deal. The 245 megawatt fuel oil-fired plant in Colon will be converted to run on coal.
Belize’s BB Holdings Places Notes with Chairman
BB Holdings, a financial services company operating in Belize, Turks and Caicos Islands and the Caribbean, has placed $50m in 10% series 2 fixed rate, unsecured, loan notes with a maturity date of November 2, 2014. It also issued 1.1m warrants to subscribe for new ordinary shares of the company at an exercise price of $6.50 until August 2 2014. The notes and warrants were offered to certain existing non-US shareholders in BB Holdings Limited. UK businessman Michael Ashcroft – BB Holdings’ chairman – bought $37.9m of the notes and 8.4m warrants and underwrote the rest of the deal. BB Holdings is actively pursuing a strategy to increase its US dollar denominated earnings in the Caribbean region and in particular in the Turks and Caicos Islands where the directors consider that there are significant opportunities. Proceeds are to capitalize The Belize Bank (Turks and Caicos) to fund lending principally in the tourism and property development sectors.
Mexico’s SHF Leads $16bn Financing Push
Sociedad Hipotecaria Federal, the Mexican government’s mortgage market development arm, is heading a new effort to help local governments and developers raise an estimated $16bn in capital market and loan financing for housing infrastructure. Speaking on the sidelines of a Moody’s structured finance conference, Paloma Silva, adjunct director at SHF, says a pilot project is currently underway in four cities and municipalities in Mexico that is expected to yield $1.7bn in project-financing-type deals. Proceeds will be used to build houses in places like Tijuana, Michoacan, Yucatan and San Luis de Potosí. Among the financing structures being considered are bonds with durations of 1-5 years with partial guarantees provided by SHF and Banobras, syndicated loans, and PPPs. Bond deals and securitizations would initially come in the $100m-$150m range, moving up to the $300m area. The first deals from the pilot project should surface in early 2008, says Silva.