Panama prices $550 million tap; JBS sells notes; Chile’s Cochrane, Mexico’s Mabe on deck

By Rebecca Melvin

New York, Oct. 18 – Emerging markets-debt players focused on the Latin America region were busy on Thursday, while other regions such as the Middle East and Africa were quieter, according to market players.

It was “all quiet,” a trader focused on the MENA region said.

In Latin America, the Republic of Panama launched and priced a $550 million tap of its 4½% bonds due in 2050, and Brazil’s JBS SA launched and priced $500 million of 7% senior notes due Jan. 15, 2026.

The Panama notes priced at 93.479 to yield 4.915%, or Treasuries plus 155 basis points. The deal size was increased from $500 million initially expected, and pricing was tight to guidance of Treasuries plus 155 bps to 160 bps and initial talk in the area of Treasuries plus 160 bps.

The new notes will form one series with the original $1.2 billion of 2050 notes, which priced in April at a yield spread of Treasuries plus 150 bps. Total deal size is now $1.75 billion.

The new bonds of JBS priced at 99.319 to yield 7 1/8%. That was tight to initial price talk in the low-to-mid 7% area.

The deal played to real-money high-yield accounts in addition to emerging markets investors, sources said.

Joint bookrunner Barclays will bill and deliver. BB Securities, Bradesco BBI, BTG Pactual and Santander are also joint bookrunners.

The meat processing company, which maintains corporate headquarters in Sao Paulo, plans to use the proceeds to refinance the JBS SA 7¾% senior notes due 2020.

In addition, Chile’s Empresa Electrica Cochrane SPA joined the calendar, announcing plans to price $725 million of 16-year notes to yield mid- to high-6%, and Mexico’s Controladora Mabe SA de CV talked its planned offering of $750 million of 10-year senior notes (expected rating: /BBB-/) to yield Treasuries plus 275 bps. The deal size was larger than the originally talked $350 million size.

JPMorgan, Citigroup and Scotia are joint bookrunners of the deal.

The proceeds will be used primarily to finance Mabe’s announced tender offer for $350 million of 2019 notes with the remainder for general corporate purposes.

Mabe is a Mexico City-based manufacturer of ranges, refrigerators, clothes dryers and washing machines.

Al Candelaria, an investment vehicle wholly owned by Advent International, talked its planned $650 million of 10-year notes (expected ratings: BB-/BBB-) to yield in the mid-7% area on Thursday, according to a market source.

Pricing of the bonds is expected Thursday.

Boston-based Advent is private equity firm that owns 22.4% of Colombian pipeline company Oleoducto Central SA, or Ocensa.

Meanwhile, Colombia’s Transportadora de Gas Internacional SA ESP priced $750 million 5.55% 10-year notes (expected rating: Baa3//) at par on Wednesday. The notes had been talked at 5¾% area initially, then tightened to a yield of 5.6% plus or minus 5 bps.

HSBC and JPMorgan were the bookrunners of the Rule 144A and Regulation S deal.

TGI is using proceeds to tender for its outstanding $750 million of 2022 senior notes.

The issuer is a Colombian gas pipeline operator.

The busy primary day for Latin America was able to proceed despite renewed volatility in the broader markets as U.S. stocks sold off and investors sought safety in U.S. Treasuries. There were a number of reasons for a bearish tone that sent the Dow Jones industrial average and S&P 500 stock indexes down more than 1% and the Nasdaq stock market down 2%. In addition to ongoing concerns about U.S.-China trade, there were growing concerns about what strained U.S.-Saudi Arabia relations might mean for global markets including oil markets as progress in the investigation of the disappearance of Saudi journalist Jamal Khashoggi appears to support Turkey’s allegations of a brutal murder and the involvement of the Saudi government. U.S. Treasury Secretary Steven Mnuchin pulled out of an investor conference in Saudi Arabia. Meanwhile the European Commission issued a warning on Thursday about Italy’s budget and Italy’s bonds fell.

Paul Harris contributed to this report.

© 2015 Prospect News.
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