After raising $40m in Panama Friday, CAF is preparing its annual trip to the USD bond market, its finance directors tell LatinFinance, and hopes to tap the Yen market by the end of the year. The Andean multilateral also intends to hit up a few of the regions’ local markets. “We will be looking at the US market for a new benchmark,” CFO Hugo Sarmiento says. CAF is in the process of choosing banks for a deal that should come in the next few months, he says. The bank, a perennial multi-currency borrower, has raised CHF bonds this year in a retap of 2015s, and would like to return to Japan. “Last year we did our first deal in the Uridashi market, and we would like to do a larger one,” international director Gabriel Felpeto says, referring to the Yen-denominated retail-only market. CAF raised $74m equivalent 3.11% of 2014 bond, the first Uridashi from a LatAm issuer. CAF will also use its local market options, and issued a 2016 $40m dollar-denominated bond in Panama Friday, with the intention of helping to develop that market. The deal priced at par with a 3.625% coupon and was managed by HSBC. Felpeto says it is the first multilateral to issue in that market. It is also considering a sale in Chile, following legislation being put in place to allow multilaterals to issue so-called Huaso bonds. Sarmiento adds that CAF, rated A1/A+, is also looking to raise a syndicated loan in Asia, though he declines to offer further details. It is heard seeking a $150m 3-year deal at around Libor+ 95bp, according to market sources.
Category: Structured Finance
Santander Brasil to Close Financing Today
Santander Brasil, through a special purpose vehicle backed by future USD and EUR cash flows generated by its electronic remittance business, will today close a dual tranche $250m private placement, according to market participants. The first tranche is a 5-year $150m loan provided by SMBC and a 7-year fixed rate bond. Pension funds and institutional investors will likely be the main buyers, says a banker with knowledge of the transaction. SMBC Nikko Securities, a subsidiary of SMBC, was the arranger. It was also the co-placement agent together with National Australia Bank. The transaction has been rated A+ by Fitch and A2 by Moody’s. The banker says the unusual bond/loan structure may have been selected by the issuer to increase the investor base and maximize the amount raised.
Suzano Readies Convertible Domestic Bond
Brazilian pulp and paper company Suzano Celulose e Papel is planning to sell BRL1.2bn in 2013 convertible bonds in a private sale, it says. The deal is divided into a BRL401.8m convertible into preferred shares, and a BRL798.2m tranche convertible into common shares. Both pay interest at ICPA+ 4.5%, and are convertible after 2 years at a rate of BRL17.39. Proceeds will fund construction on a new unit at its industrial plant in the state of Maranhao. An investor relations official explains the debentures are to be offered to controlling shareholders, with BNDES agreeing to guarantee to buy up to BRL572m of the remainder. Suzano is rated Aa1/A+ on a national scale.
Infonavit to Issue MXP Bonds
Mexico’s Infonavit is planning to sell up to MXP4.58bn UDI-denominated RMBS, according to a regulatory filing. The 2039 bonds are expected to be issued on or around June 1. The proceeds will be used to create new mortgages. Banamex and HSBC are managing the sale, rated AAA on a national scale. The government-run mortgage lender last came to the local market in March, when it issued MXP4bn in UDI-denominated RMBS, after receiving over MXP10bn in demand. Those 2039 bonds were priced at 4.95%, or Udibonos plus 202bp.
Midsized Brazilian Banks Face Challenges
Brazilian midsized banks could face significant challenges to their business models despite experiencing significant growth, according to a Fitch report. The high level of risk associated with wholesale funding is a major concern, says the report. “The evident mismatch in terms of funding (concentration and tenor) and assets (midterm retail loans) results in a credit negative for this segment,” says Fitch. Rapid loan growth is also cause for concern. Profitability could be impacted by lower-than-expected growth in future, although profitability has so far been in ilne with market trends, according to the ratings agency. Liquidity is also a key cause for concern, says Fitch, as is competition from larger players, maintaining capital adequacy ratios and the ability to continue to access funding. Government measures to fight inflation and systemic credit risk could also affect the strategies of some banks, with smaller banks possibly having to sell their business, adds the report.
Honduras Gets IDB Loans
The IDB has given Honduras two loans for a combined total of $37m, the multilateral says in a release. The first loan is for $25.9m and has a 30 year maturity, with a 5.5 year grace period. The announcement did not specify the interest rate of the first loan. The second loan is for $11.1m, has a maturity and grace period of 40 years and an interest rate of 0.25%, adds the release. The loans will be used to improve basic education for the country’s poorest children. The proceeds will go towards new books, educational materials, computers and teacher training.
Incentivo Launches Multi-sector FIDC
Regulators have approved a BRL200m FIDC transaction from Brazilian brokerage Incentivo DTVM, according to regulatory filings. The fund will acquire credit receivable assets in sectors including finance, real estate, industrial and agriculture during a period of five years. The shares are expected to pay 120% of the DI, and the fund has an indeterminate maturity. It is rated BBB+ on a national scale. Incentivo is managing the placement.
Geo’s Maquinaria Prices Bond
In its second attempt in the dollar bond markets, Geo’s Maquinaria Especializada has priced a $160m 2021 bond. The BB minus deal priced at 99.890, with a 9.652% coupon to yield 9.750%, in line with whispers heard earlier in the week. Last week, the Mexican homebuilder revived the structure it had tried to bring last year for the special purpose entity that allows it to raise funds off balance sheet and free up cash for land bank acquisitions. The deal – closer in nature to a private placement according to bankers on the deal – saw about $200m in demand from banks, private banks, hedge funds, asset managers an others, the bankers say. More than half went to US investors. The Maquinaria trust was created as a special purpose vehicle by Geo. The Mexican homebuilder sold Maquinaria its construction equipment assets, and maintains a 10-year service contract to use the equipment for its projects. This allows Geo to avoid debt on its own balance sheet. Geo filed for a similar domestic ABS deal last year before roadshowing the Maquinaria dollar bond in October. It held back on a deal then due to market volatility. Santander managed the sale.
Prudential Plots CCD Sequel
Prudential Mexico is preparing a Certificado de Capital de Desarrollo (CCD) transaction, according to regulatory filings, what would be its second issuance in the asset class. The local subsidiary of the US financial institution is considering a 10-year deal of up to $500m equivalent that would invest in real estate projects, according to a banker on the deal. This would be similar to the MXP3.7bn CCD sold in August, and would represent Prudential’s fifth Mexican real estate fund. The structure eyes a 5-year investment period. BBVA Bancomer, manager of last year’s sale, is leading the deal.
GANA Brings Back MXP ABS
An OHL subsidiary priced an MXP1.7bn 2031 UDI-denominated toll road securitization at par with a 6.64% coupon to yield 338bp over the 2025 Udibono benchmark. The pricing is in line with 6.60%-6.70% price talk for OHL Mexico’s Grupo Autopistas Nacional (GANA). The deal was only marginally oversubscribed, with MXP200m of extra demand. The proceeds will be used to repay financing that was used to fund the construction of a 123km toll-road from Puebla to Veracruz. The bonds, rated AA on a national scale, are backed by the road operator’s toll revenues. The main investors were pension funds, investment funds and banks. “This was attractive because there are not many toll road securitizations and also because OHL, the sponsor, has good management and worldwide operations,” says one participating investor. Another buysider adds that the road backing the bonds is one of the few in Mexico that experienced a rise in revenues during the crisis. “The spread, together with the fact that the toll road backing the bonds is doing well, means it is an attractive issuance,” he says. Santander and Invex were bookrunners on the deal. The last toll road ABS in Mexico was the MXP2bn 2023 done by Agrupacion de Companias Constructoras de Veracruz for the Cardel-Veracruz road in May 2010. The deal, through Banco Interaciones, got a 6.0 % yield.