Wednesday, 18 February 2009

Colombian Bond Sales Thrive. Leasing de Occidente Places 400 Billion Pesos in Various Tenors, Including Five-Year+ Debt

Oh Gloria inmarcesible, oh júbilo inmortal ...
Que nos dure la dicha en el mercado
de capitales por un tiempito más largo ...

Yesterday, Leasing de Occidente, a leasing arm of local financial giant Grupo Aval, announced the sale of 400 billion pesos ($160 million) of domestic senior notes. The company told the securities regulatory agency, Superfinanciera, that about 47 percent of the total issuance was placed for five years and more. Details on the yield and the tranches were not unveiled (this is data that the regulator should require companies to disclose. You can't really gauge corporate risk unless information on borrowing costs paid, conditions and terms for transactions like this is made public.) Colombia is bucking a regional trend of declines in sales of corporate debt. Included Leasing's transaction, six debt placements worth a total 2 trillion pesos have taken place this year. Most notes are paying floating rates linked to the benchmark DTF interbank rate and the inflation index IPC. One thing that is key to highlight is the fact that privately-owned companies (those that have no equity listed or trading in the local stock exchange) are making their debut sales in the local capital markets -- a positive news for arrangers, the borrowers and investors in general: Alpina, the traditional dairy producer and food processor, sold last week 264 billion pesos in 10-, 12- and 15-year debt. In Brazil, only two borrowers, holding company Bradespar and telecom giant Vivo Participações, have been able to issue debt -- at rates way higher than those practiced a year or less ago. Mexico is also seeing a revival in debt sales, but only for commercial paper (debt with maturities of less than 12 months.) We wrote extensively about this in a couple of postings last week. The prospects for more placements look promising: declining interest rates may force investors at some point to look for investment alternatives other than zero- or fixed-coupon government bonds. One trader recently told me that the appetite for highly-rated corporate debt is growing, helped also by the outlook for inflation (as the country moves into recession, probably, price increased should ease towards levels within the central bank's target of 5 or so percent.) Duff and Phelps, a local ratings company, said in a report yesterday that Colombina, a candy and snacks maker, may be considering the sale of 150 billion pesos of notes to refinance existing obligations. One interesting aspect of this wave of new issues is the fact that investors are ready to lend to companies seeking to replace old debt for new debt, but not for new investment projects. One week ago, a top executive in the construction industry said accessing the market for new expansion plans will be tough.

1 comment:

  1. To get both US and Colombia Government Bond Quotes: