Tecpetrol, IEnova join calendar; Cemig on tap; Alibaba launches $7 billion five-trancher

By Rebecca Melvin

New York, Nov. 29 – More issues joined the Latin Americas deal calendar on Wednesday, including Argentina’s Tecpetrol SA and Mexico’s Infraestructura Energetica Nova SAB de CV, or IEnova, and investors anticipated initial price talk on the Cemig Geracao e Transmissao SA $1 billion to $1.5 billion of notes on Thursday.

Cemig GT was wrapping up a roadshow on Wednesday on its seven-year eurobond deal, proceeds of which will be used to repay debt.

Meanwhile, Argentina’s province of Rio Negro has been on the road for $300 million of seven-year notes and Brazil’s Gol Linhas Aereas Inteligentes SA is marketing notes through next Tuesday to fund a tender offer.

Latin America continued to push out deals that have been in the pipeline, while the Central & Eastern Europe, Middle East and Africa region was largely quiet.

“People are trying to get things done before year-end,” said a New York-based syndicate source, who added, “We’re busy.”

The LatAm market had been red hot coming into the typically quieter year-end period, and it does not seem to be letting up yet, as an attitude of “fit it in” prevails rather than “wait until next year,” a market source said.

The green light has not turned yellow even as a spate of volatility hit the broader markets.

Moody’s Investors Service upgraded the government of Argentina’s local and foreign currency issuer and senior unsecured ratings to B2 from B3 on Wednesday, citing effective economic reforms and a recent return to positive growth.

Argentina’s president Mauricio Macri has fostered credit positive policy reforms administration since December 2015. These include a free-floating exchange rate, an open capital account, an independent central bank with multiyear inflation targeting and more credible public statistics. The combination of these reforms have bolstered economic growth prospects and were key drivers of the upgrade, Moody’s said in a release.

The rating agency said these macro-economic reforms are beginning to address existing distortions in Argentina’s economy.

The outlook is stable even as Argentina balances credit strength, such as a large and diverse economy, against challenges like fiscal deficits and reliance on external financing, which makes it more vulnerable to external credit risk.

Meanwhile, Alibaba Group Holding Ltd. launched on Wednesday a $7 billion five-tranche deal, for which final terms were expected to be set soon.

The Hangzhou, China-based e-commerce group and internet portal plans to price a $700 million tranche of 5˝-year notes, launched at a spread of U.S. Treasuries plus 73 basis points; a $2.55 billion tranche of 10-year notes, launched at a spread of Treasuries plus 108 bps; a $1 billion tranche of 20-year notes launched at a spread of Treasuries plus 118 bps; a $1.75 billion tranche of 30-year notes, launched at a spread of Treasuries plus 138 bps; and a $1 billion tranche of 40-year notes that was launched at a spread of Treasuries plus 158 bps.

Proceeds of the notes are earmarked for general corporate purposes, including working capital needs, repayment of offshore debt and potential acquisitions of, or investments in, complementary businesses.

Morgan Stanley, Citigroup, Credit Suisse, Goldman Sachs (Asia) LLC and JPMorgan were bookrunners of the notes. Co-managers are ANZ, BNP Paribas, DBS Bank Ltd., HSBC and ING.

Tecpetrol plans notes

Tecpetrol’ scheduled roadshow starts Thursday and wraps up on Monday for a planned offering of up to $500 million of medium-term senior unsecured notes that will follow subject to market conditions.

The Buenos Aires-based oil and gas exploration and production company has mandated BBVA, Citigroup, JPMorgan and Santander to arrange the fixed-income investors meetings for the Rule 144A and Regulation S offering.

The notes will be guaranteed by parent Tecpetrol Internacional SLU.

IEnova hits the road

IEnova has set up meetings for Monday through Wednesday in Boston, New York, Los Angeles and London with regard to an offering of up to $840 million of notes.

The gas pipeline company is rated Baa1 by Moody’s rating agency with a negative outlook related to its increased leverage due to recent investments and acquisitions.

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