Brazilians Lead Borrowers Back into Action

The cross-border debt capital markets continued to show signs of revival following disruptions to the US markets earlier this week, with Usina Sao Joao Acucar e Alcool (USJ) set to price a new bond as soon as today, and fellow Brazilians Cielo and Marfrig heading out to visit investors. USJ has revised yield guidance from mid-10% range to 10.375% for a 2019 NC4 expected to be $200m-$300m, according to sources familiar with the sale. Credit Suisse, HSBC and Itau are managing the BB minus/BB minus transaction. Credit card payment processor Cielo is set to go on a roadshow that is likely to precede a debut benchmark-size bond. It is targeting $750m-$1.0bn, according to Fitch and Moody’s, which assign respective BBB+ and Baa2 ratings to the deal widely expected since the $670m acquisition of US payment processor Merchant e-Solutions in July. Proceeds are destined for debt refinancing and for general corporate purposes. Cielo is scheduled to see accounts beginning in London on Monday, followed by visits to Boston Tuesday, New York Wednesday, and the US West Coast on Thursday. Banco do Brasil, Bradesco and Goldman Sachs are managing. Meanwhile, B2/B+/B+ meatpacker Marfrig is meeting bond investors in the US and London through Monday, on a non-deal basis with Bank of America Merrill Lynch. Marfrig was last in the bond market in May 2011 when it raised a $750m 2018 bond to yield 8.6%. It is also preparing a BRL1.27bn ($626m) equity follow-on, expected to price later this month through BAML, Bradesco, Banco do Brasil, Deutsche Bank and Itau. Others who are in the pipeline to price cross-border bond deals once issuance resumes include Southern Copper, Queiroz Galvao Oleo e Gas, Santander Mexico and Sifco.