Panama’s Banco General has closed a $100m bond backed by future and existing USD-denominated diversified payment rights (DPR), according to Fitch, which assigns an A rating. Wells Fargo is heard managing the private placement. The 2019 bond features a two year interest-only period with no principal payments and pays a spread to Libor. Further details of the transaction were not disclosed. The bank’s DPR flows reached $1.7m during the first half of 2012 and $3.8bn in 2011.
Category: Structured Finance
Posted inDaily Brief
Interjet Lands Domestic ABS
Mexico’s Interjet has sold MXP1bn ($77m) in asset-backed bonds in the domestic market. The 2017 bond with a 2.5-year average life is backed by credit card receivables from airline ticket purchases. It pays TIIE+270bp, landing at the wide end of TIIE+250bp-270bp expected range. Bank of America Merrill Lynch led the transaction, rated AA minus on a national scale.
Posted inDaily Brief
Scotiabank Peru Targets $400m
Scotiabank Peru is targeting a $400m size for a planned 2027 NC10 Tier 2 bond issue, according to Moody’s. The agency assigns a Baa2 rating. The Bank of Nova Scotia subsidiary is scheduled to wrap up a roadshow Thursday, with pricing expected to follow. The 15-year subordinated bonds will have a fixed coupon for 10 years and revert to a floating rate afterwards. The Baa2/BBB+ bank is being comped against Banco de Credito del Peru’s (Baa3/BBB minus) $350m Tier 2 2027 NC10 bond, quoted at UST+350bp Tuesday. Bank of America Merrill Lynch, Goldman Sachs and Scotia are managing the sale. It would be Scotia Peru’s first international offering since a $175m diversified payment rights securitization done in 2010, according to Dealogic data.
Posted inDaily Brief
Interjet Preps Domestic ABS
Mexico’s Interjet is preparing to issue up to MXP2bn ($154m) in asset-backed bonds in the domestic market on Tuesday. The 5-year floating rate bonds have a 2.5 year average life are backed by credit card receivables from airline ticket purchases – which constitute 60% of sales. The airline aims to price in the TIIE+250bp-270bp range. Bank of America Merrill Lynch is leading the transaction, rated AA minus on a national scale.
Posted inDaily Brief
Argos Lays Foundation for Convert Sale
Colombia’s Grupo Argos is expected to issue COP500bn ($274m) in convertible bonds in a process starting today and expected to price Wednesday, say sources familiar with the Colombian conglomerate’s plans. The sale may be upsized to COP750bn. The 3-year bond comes with a 5.0% coupon and is convertible into preferred shares at the holder’s discretion during the life of the bond, and mandatorily at maturity. Bancolombia is leading the deal, rated AA+ on a national scale, with Bolsa y Renta, Corredores Asociados, Correval and Serfinco as bookrunners. In a research report, Bolsa y Renta highlights the papers as a medium-term play for investors that is ideally held to maturity.
Posted inDaily Brief
Veracruz Returns for Local Securitization
Veracruz has returned to Mexico’s domestic bond market, addressing a small bit of its refinancing needs with a MXP4.86bn ($369m) three-tranche securitization of future federal payment flows. Though the issuer raised less than it could have, bankers and other states are hopeful the transaction signals a reopening for sub-sovereign entities to issue in the local market. A MXP1.86bn 2027 fixed-rate peso-denominated tranche with an 11-year average life pays 8.90%, or Mbonos+300bp. A MXP700m 2027 floating rate peso-denominated tranche with an 11-year average life pays TIIE+200bp. A MXP2.3bn 2037 UDI-denominated tranche with a 19-year average life pays 5.80%, or UDIbonos+365bp. The long tranche was the only one of the three that hit the MXP2.3bn limit set for each tranche. Demand ranged from 1.22x-1.25x for each tranche, with Afores, pension funds, insurance companies and bank trading desks driving demand. “The deal shows appetite for sub-sovereign risk in Mexico from institutional investors, but one cannot fail to note that investors are clearly cautious and requiring to get paid to take on the risk,” says a credit analyst following the transaction. The bonds feature covenants that limit debt, and a guarantee from development bank Banobras for up to 45% of each tranche. Proceeds will be used towards the state’s MXP30bn refinancing plan, as it seeks to refinance liabilities and improve its debt profile. Banamex, Banorte-Ixe and BBVA Bancomer managed the deal, rated AA/AA+ on a national scale and the first of its type since the state of Oaxaca priced a MXP1.95bn 15-year Banobras-backed bond in December 2011. Last year, the state’s congress approved the restructuring of MXN 12.6bn in outstanding debt and the issuing of MXN 17.4bn, following several years of poor financial performance.
Posted inDaily Brief
Mexican Toll Road Eyes Local Debt Market
The Monterrey-Saltillo toll road plans to raise up to MXP4.5bn ($345m) in Mexico’s domestic bond market the week of November 19, according a source familiar with the transaction. The concession is looking to offer UDI-denominated notes with a maturity of approximately 25 years, with proceeds repaying bank loans and subordinated debt with the government Fonadin fund. The toll road, owned by Spain’s Isolux-Cosan, has been operational for almost a year. Santander, ING and Bank of America Merrill Lynch are bookrunners on the transaction, rated AA/AA+.
Posted inDaily Brief
Ample Space for Private Financing: Coutinho
There will be plenty of room for private sources to fund a coming “big wave” of infrastructure investment in Brazil alongside BNDES, Luciano Coutinho, the state development bank’s president, tells LatinFinance. “The main hindrance for the big participation of private forces in long-term finance was the very high short-term interest rates in Brazil. Turning this page was the big novelty. This idea that the BNDES is ‘crowding out’ usually comes from economists that do not know how the market works,” the official says. Coutinho explains the share of financing for infrastructure based on financial instruments will grow fast in the coming years, and reach “at least 20%-30% of the long-term financing market,” now that Brazilian investors are forced to diversify investment away from government paper. “In this way, BNDES’s absolute size will not shrink because the overall pie is growing. But almost all the addition of demand, the financial expansion, must be met by the market,” Coutinho says. The bank will seek ways to share financing of large individual projects. “Initially we will try at the minimum of 10%–15% or even more if the market has the appetite for the projects, either through long-term bonds or long-term credit. We’re also engaged in structuring infrastructure funds… we can be a minority partner, taking 10%-15% position in funds, so as to help the investment banks to structure private equity or other funds,” he says. Legislation such as that creating infrastructure debentures, as well as a PPP concession model successful in the electricity sector that can be applied to other areas, are other developments that should lure more private investment. Brazil must add another $40bn-$50bn per year in infrastructure investment, brining the total from 19% of GDP to 21% or more, Coutinho says.
Posted inDaily Brief
Bus Operator Postpones Securitization
Mexico’s IAMSA has put off a MXP3.5bn ($268m) securitization that had been scheduled to price today in the domestic market. “The bus operator decided to postpone as pricing expectations were not met,” says a person familiar with the transaction. IAMSA was looking to price in the Mbonos+390bp-area spread range for the 15-year bond. The new timing is unclear. Santander is managing the sale, rated AAA/AA minus on a national scale.
Posted inMagazine
Colombia Best Bank: Banco Davivienda
Colombia¹s banks have been on a roll for the past two years, but they face stiff competition from abroad. The country¹s robust growth has buoyed the banking sector and fuelled […]