Banco do Brasil’s BB Seguridade unit has priced a BRL11.48bn ($5.74bn) IPO near the top of the range and has used full overallotment options to give LatAm its largest IPO in almost four years. The insurance business carve-out is offering 675m secondary shares at BRL17.00 each, according to the CVM, above the midpoint of the BRL15.00-BRL18.00 range. The total includes a 15% greenshoe and full use of the 20% hot issue option. The sale was heard getting at least 2x in orders. As with most Brazilians daring to IPO, the business is widely considered attractive, with most of the questions leading up to the sale having revolved around the valuation. “This is a good company with solid numbers. Bank insurance is growing more quickly in the last few years than independent insurance companies,” says a Sao Paulo equity portfolio manager looking at the deal. Banco do Brasil’s pitch is that the “bancassurance” model uses the state-controlled bank’s wide reaching client channels to sell insurance products and brokerage services. Premiums sold in Brazil were up 13.4% in 2012 from 2011, the bank says, and insurance penetration in Brazil, at 1.7%, is well below developed markets. Banco do Brasil has consolidated its insurance businesses into the single BB Seguridade entity to lower costs, increase scale and be better prepared for expansion and competition with the likes of Bradesco. BB Seguridade controls Banco do Brasil’s two insurance joint ventures with Madrid-based Mapfre, and the bank has said it also plans to also expand into dental and health insurance brokerages. The entity directly controls two holdcos, one responsible for insurance brokerage activities and the other for all other insurance operations. The transaction should result in a 29% free float. Banco do Brasil, BTG Pactual, Bradesco, Citi, Itau, and JPMorgan were global coordinators on the sale, with Brasil Plural and Banco Votorantim as joint bookrunners. It is the largest IPO in LatAm since Santander Brasil raised
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Bolivia Picks Banks for Cross-Border Sequel
Bolivia has mandated Bank of America Merrill Lynch and HSBC to manage its next international bond transaction, according to people familiar with the matter. Plans for timing, size and tenor are unclear. The sovereign raised $500m in October 2012, its first international bond in several decades, getting a 4.875% yield through Bank of America Merrill Lynch and Goldman Sachs. Bolivia is rated Ba3/BB minus/BB minus.
Chilean Set for Domestic Debt Sale
Banmedica is scheduled to issue up to UF2.2m ($104m) in Chile’s domestic bond market today, according to people familiar with the plans. The Chilean health insurance and health services provider is considering three options. A possible 3.4% 2020 UF-denominated tranche amortizes from 2017, a 6.5% 2020 peso-denominated tranche also amortizes from 2017, and a 3.8% 2034 UF portion amortizes from 2029. The issuer is heard favoring the shorter peso tranche and the longer UF tranche for the deal, which being done to raise funds to refinance liabilities and for investment. IMTrust and Credicorp are managing the deal, rated AA minus on a national scale.
Credit Agricole Loan Vet Exits
Jean-Philippe Adam has left Credit Agricole, according to people familiar with the matter. The veteran banker was head of loan syndications for Latin America. It was not immediately clear where he was headed.
Falabella Adds First Corporate Global CLP
Falabella has raised $750m in its debut visit to the international bond market, adding the first-ever Chilean corporate CLP tranche to a planned dollar bond after getting reverse interest. The Chilean retailer drew more than $3bn demand for a $500m dollar portion and saw the $200m-equivalent CLP portion draw about $400m in orders, according to people following the sale. The BBB/BBB rated issuer priced the $500m 2023 at 99.086 with a 3.75% coupon to yield 3.861%, or UST+215bp, tight to 215bp-220bp guidance revised from earlier 225bp-area, and to earlier low-to-mid 200s talk. The bond was heard up 0.25 points Thursday afternoon. After announcing the dollar portion, reverse interest led to a 2023 CLP tranche, which priced at par with a 6.50% coupon, in line with 6.50% guidance. Bankers familiar with the deal say the global-CLP pricing compares favorably to what it would get in dollars and in CLP in the domestic market. With no appropriate comparable retail names, the retailer was comped against BBB comps in the region. SQM’s 2023 (Baa1/BBB) was seen trading around 3.63% or 194bp on a G-spread basis, and Telefonica Chile’s 2022 (BBB/BBB+) was at 4.07%, or 245bp on a G-spread basis. The dollar portion drew over 200 accounts, with US accounts taking 45%, Europeans 30%, and Asians and Latin Americans totaling for 25%. Buyers included fund managers, pension funds, insurance companies and private banking. Falabella plans to use proceeds to refinance $400m in short-term debt due in 2013 and for general corporate purposes. Citi, HSBC and Itau managed the transaction.
Femsa Preps Roadshow
Mexico’s Femsa is planning investor meetings next week, according to people familiar with the transaction. The issuer is targeting a new international bond, of up to $1bn at up to 30 years, according to a report from Fitch ratings, which assigns an A rating. Starting Monday, Femsa will meet investors in Santiago, London, Lima, Los Angeles and Boston and the US East Coast, the US Midwest and finish in New York May 6. The issuer is looking for funds to refinance debt at the holding company level and for general corporate purposes. BBVA, Citi, and Goldman Sachs are managing the deal. Femsa has made use of Mexico’s domestic bond market in recent years, but has not sold a cross-border bond since 1999, according to Dealogic data. The potential SEC-registered transaction is expected to be rated BBB+/A.
GNB Prices Senior Bond
Banco GNB Sudameris has raised $300m while adding a senior bond to its curve. The BB+/Ba1 Colombian bank generated around $800m demand from 100 accounts. The 2018 priced at 98.881 with a 3.875% coupon to yield 4.125%, or UST+340bp, tight to 4.25%-area guidance and earlier mid-4% initial price thoughts. The new bond was trading around reoffer late Thursday, investors say. “I found the deal expensive and not offering a good pickup to other banks,” says a New York-based senior portfolio manager who calculated fair value at a higher 4.375%. A banker away from the deal calculated fair value at 4.20% yield, suggesting the deal offered negative new issue premium. Bank of America Merrill Lynch was sole lead. The ninth-largest private bank in Colombia by assets raised funds for general corporate purposes, though analysts say it may pay off expensive debt in the local market, bilateral debt and possibly use funds to fund the HSBC acquisitions in LatAm. GNB, which agreed to buy HSBC’s operations in Colombia, Uruguay, Peru and Paraguay last year, made its DCM debut in July 2012, selling $250m of the 2022s.
IMPSA Eyes Bond Return
Argentina’s Industrias Metalurgicas Pescarmona (IMPSA) is planning a roadshow next week ahead of a possible cross-border bond sale, according to people following the process. The sustainable power generation company is readying a 2018 bond with size to be determined, according to Fitch, which assigns a B+ rating. Split between three teams, fixed-income meetings visit Los Angeles, Switzerland, Santiago, New York, Boston and Miami Monday through Wednesday. Proceeds will be used to repay short-term debt. Barclays, Bradesco and UBS are managing. IMPSA last visited the bond market in 2010, through its Brazilian WPE unit. It raised $275m in 10.375% 2015 bonds that priced to yield 10.750%.
Itau Plucks BAML ECM Banker
Facundo Vazquez has left Bank of America Merrill Lynch, where he was head of LatAm ECM, according to sources familiar with the matter. He is to join Itau, the sources say. It is unclear who is to replace him at BAML. Spokesman at each bank declined to comment.
Maxcom Tender Falls Short
Maxcom Telecomunicaciones has failed to meet minimum requirements for the completion of a debt and equity buyback, it says, and will cancel the offer and seek other options, including bankruptcy. The Mexican telecom, counting on the process to meet an interest payment and complete a takeover by private equity investors, had received acceptance from 62% of holders of its 11% 2014 bonds and 45% of the stock as of Wednesday’s deadline. It had offered bondholders new 2020 bonds paying 7.0% during the first three years, 8.0% during the following two years and 10.0% during the final two years. The offers follow the agreement last year for Ventura Capital Privado to buy Maxcom, at an enterprise value of about $270m.