Latin Finance - May/June 2011 - 6

Debt

Corporate Flow

agreement. The bond pays Libor plus 500 basis points. Bank of America Merrill Lynch, JPMorgan and RBS managed. DCM issuance began to pick up again in March and April after a On the sovereign side, Mexico retapped its 6.05% 2040, to weak start to the year, though the message remained the same: get a 5.95% yield. The $1 billion deal through Bank of America buyers were more selective than in 2010, and concerned about Merrill Lynch and Deutsche Bank was upsized from $500 million inﬂation. Though not generally in need of cash, corporate issuers on $4.4 billion demand, and brings the benchmark’s size to looking for funding before a potential increase in US interest $4.25 billion. Sovereigns are less active than last year, though rates still dominated new deal ﬂow. Uruguay was heard planning a samurai issuance for May-June. “Investors’ biggest concern is A 10-year JBIC-guaranteed bond is inﬂation,” says Jim Harper, director of likely, through Daiwa and Nomura. On DCM Rank by Volume, Year to April 15 corporate research at BCP Securities. the corporate side, issuers including Citi doing the biggest deals “There are still inﬂows into the asset Banco Galicia, OGX and Pemex were Rank Bookrunner Value $m # Deals class and still deals getting done.” expected to come in April and May. 1 Citi 5,993 25 “For ﬁxed-income, it is an issue of 2 HSBC 4,823 25 relocation,” says Paul Denoon, head 3 JPMorgan 4,437 18 of EM debt at AllianceBernstein. He Mexican domestic blue-chip issuance 4 Deutsche Bank 4,322 18 explains that there may be more funds continued to pick up with Coca-Cola 5 Santander 3,708 16 going into products other than straight Femsa raising 5 billion pesos, in a ﬁxed EM, such as multi-sector funds with an and ﬂoating-rate transaction. A 2.5 6 BofA Merrill 3,679 18 EM component. The slowdown in ﬂows billion peso 5-year ﬂoating tranche 7 Banco Itaú 2,213 12 is not a major concern at this point, priced at TIIE plus 13 basis points, 8 BBVA 2,120 10 he adds. EM bond funds posted a net and a 2.5 billion peso 10-year yielded 9 Credit Suisse 1,892 5 inﬂow of $2.32 billion for Q1 2011, 8.27%. HSBC and Santander managed 10 BTG Pactual 1,418 6 according to EPFR, compared to $11.54 the deal. The deal followed a 10 billion Subtotal 34,605 82 billion during the corresponding period peso Pemex 2016 raise. The stateTotal 44,464 91 last year. owned oil producer got 23 billion pesos Source: Dealogic Though there may be fewer in orders, and priced at TIIE plus 21 available funds in the asset class, basis points. demand can still be overwhelming DCM Rank by Fees, Year to April 15 for a quality high-yield issuer. Brazil’s Citi dominates wallet Hypermarcas drew more than $6 billion Rank Bookrunner Revenue $m % Share in orders for a $750 million 2021 NC5 Vale brought size back to the LatAm bond, getting 6.750% yield. Bradesco, loan market, closing a $3 billion 1 Citi 31 18.90 Citi, HSBC and Itaú managed the Ba2/ syndicated loan in April. The 5-year 2 Credit Suisse 23 14.00 BB/BB minus deal, the dollar debut for revolver is for working capital 3 JPMorgan 19 11.50 the consumer products company, which purposes, and pays 65 basis points 4 BofA Merrill 17 10.40 highlights a shortage of Brazilian names over Libor, with a 15 basis point fee for 5 HSBC 11 6.80 in the high 6%s. utilization of up to 66% and 30 basis Subtotal 100 61.50 Braskem took advantage of two points for further utilization. Credit Total 163 100.00 investment grade ratings to raise $750 Agricole, JPMorgan, Mizuho and Source: Dealogic million to replace more expensive debt. Natixis led a syndication of 27 banks. Buyers put in for $2.5 billion, and the Mexico’s América Móvil was petrochemicals producer got a 6.00% yield. Citi, Deutsche Bank expected to complete a $4 billion dollar and euro loan by the and Santander managed the Baa3/BBB minus/BB+ deal. end of April. Bankers expected a 5-year tenor at Libor plus 50-60 Mexico’s Sigma Alimentos raised $450 million in 2018 basis points. A $2 billion 3.5-year loan pays Libor plus 50 basis bonds, topping the $300-$400 million size it had expected on points, with a 15 basis point commitment fee. A $2 billion$1.75 billion demand. The BBB minus food products company equivalent euro-denominated 5-year tranche pays Euribor plus got a 5.772% yield, switching to the dollar market after planning 60 basis points, with a 20 basis point commitment fee. Bank of a domestic sale. Bank of America Merrill Lynch and JPMorgan Tokyo Mitsubishi, BBVA, Citi, Intesa and Mizuho are managing managed. the dollar portion, and Bank of Tokyo Mitsubishi, Citi, Intesa, Cemex continued to hit the targets laid out in its 2009 debt JPMorgan and Société Générale on the euro. HSBC is lead restructuring agreement. The cement maker sold $800 million in arranger on both. LF 2016 3.25% convertible bonds, and $600 million in 3.75% 2018 UPDATE > converts. Both come with 30% conversion premiums. JPMorgan and Citi managed. It followed with an $800 million four-year For daily local and international DCM news, see www.latinﬁnance.com ﬂoating-rate bond, to take out ﬂoating debt in the restructuring

Mexico Warms Up

Blue Chips Tie up Jumbo Loans

6 LATINFINANCE

May/June 2011

http://www.latinfinance.com

Latin Finance - May/June 2011

Table of Contents for the Digital Edition of Latin Finance - May/June 2011