Issue: Daily News - 10 November 2010
By Euroweek Reporter
Banco Votorantim brought its debut Swiss franc deal to market on Wednesday morning, a Sfr250m three year.
Sole bookrunner Deutsche Bank priced the deal 204bp over swaps, beating Votorantim’s dollar funding costs in the three year tenor. The issuer is the first Brazilian issuer to do a Swiss franc deal since 1995.
A syndicate banker from Deutsche said that Latin America generally, and Brazil in particular, has a great macro story.
He also highlighted Votorantim’s business model and defensive ownership — the bank is 50% owned by Banco do Brasil, a state-owned entity, and 50% owned by the Votorantim conglomerate.
The issue went almost entirely to retail investors. The bond was fully placed, but not oversubscribed, although it is already performing in the aftermarket — it has tightened around 2bp since pricing on Wednesday morning.
Because absolute yields are so low in the Swiss franc market, investors are looking further down the credit curve or at longer maturities, creating opportunities for EM issues in what some consider a conservative market.
Deutsche took Votorantim on a three day roadshow last week.
Because the deal hit Sfr250m, it is eligible for the Liquid Swiss Index, the benchmark for many asset managers in the market.
Banco Votorantim: The Votorantim Group is one of the largest privately-held industrial conglomerate groups in Latin America.
Swiss franc: The franc (German: Franken, French and Romansh: franc, Italian: franco; code: CHF) is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia.
Swaps: In finance, a swap is a derivative in which counterparties exchange certain benefits of one party's financial instrument for those of the other party's financial instrument.
The benefits in question depend on the type of financial instruments involved. For example, in the case of a swap involving two bonds, the benefits in question can be the periodic interest (or coupon) payments associated with the bonds.
Specifically, the two counterparties agree to exchange one stream of cash flows against another stream. These streams are called the legs of the swap.
The swap agreement defines the dates when the cash flows are to be paid and the way they are calculated.Usually at the time when the contract is initiated at least one of these series of cash flows is determined by a random or uncertain variable such as an interest rate, foreign exchange rate, equity price or commodity price.
The cash flows are calculated over a notional principal amount, which is usually not exchanged between counterparties. Consequently, swaps can be in cash or collateral.
Derivative: a word or thing that has been developed or produced from another word or thing.
Collateral: Property or sth valuable that you promise to gvie to sb if you cannot oay back money that you borrow.
Tenor : The length of time until the maturity date is often referred to as the term or tenor or maturity of a bond
Issuer: is the entity (company or govt.) who borrows an amount of money (issuing the bond) and pays the interest.
Syndicate： The most common process of issuing bonds is through underwriting.
In underwriting, one or more securities firms or banks, forming a syndicate, buy an entire issue of bonds from an issuer and re-sell them to investors.
Aftermarket: The period immediately after the market listing of shares issued via an Initial Public Offering (IPO), when investors can trade in the stock for the first time.
Yield: to produce or provide sth, for example, a profit, result or crop
Maturities: Maturity: (of an insurance plicy, etc.)the time when money you have invested is ready to be paid
EM: emerging market
Liquid Swiss Index: Credit Suisse is a leading global financial services company, offering clients financial advice in all aspects of private banking, investment banking and asset management.
Credit Suisse First Boston launched the Liquid Swiss Index (LSI) at the end
Benchmark: Something which can be measured and used as a standard that other things can be compared with
Asset managers: Asset management refers to the professional management of investments such as stocks and bonds, along with real estate.
Dealer: a person whose business is buying and selling a particular product
Roadshow: a travelling show arranged by a radio or television programme, or by a magazine, company or political party
Yield curve: In finance, the yield curve is the relation between the interest rate (or cost of borrowing) and the time to maturity of the debt for a given borrower in a given currency.
For example, the U.S. dollar interest rates paid on U.S. Treasury securities for various maturities are closely watched by many traders, and are commonly plotted on a graph such as the one on the right which is informally called "the yield curve." More formal mathematical descriptions of this relation are often called the term structure of interest rates.
Showing posts with label capital market. Show all posts
Showing posts with label capital market. Show all posts
Friday, 10 December 2010
Banca Popolare di Vicenza taps MTNs for Eu155m
Issue: Daily News - 3 November 2010
By Euroweek Reporter
Italy’s Banca Popolare di Vicenza sold a Eu155m floating rate note on Tuesday — its largest private placed bond since 2005 and its first outing in the market since March.
The three year note, dealt through Royal Bank of Scotland and sold at par, pays a coupon of 200bp over six month Euribor for the first two years, stepping down to 40bp over for the remainder.
Banca Popolare di Vicenza sold a Eu500m two year floating rate note in the public market late in September. That paid 155bp over three month Euribor and was sold at par.
"The 200bp coupon would be a decent premium on the two year FRN issued in September,” said Dietmar Tzschentke, bank credit analyst at UniCredit in Munich.
“That steps down to plus 40bp in May 2013 — the investor is betting that Euribor will go up in two years time to compensate for the step down in spread."
Aside from the Eu500m public deal sold late in September, this is the bank’s first outing in the European bond markets since March, when it sold a Eu120m floating rate private placement due 2012, according to Dealogic. That deal paid a coupon of 80bp over three month Euribor and was issued at 99.8.
It is also the issuer’s largest private placement since September 2005, when it sold a Eu300m two year floating rate note via HSBC, according to Dealogic. That note paid a coupon of 10bp over three month Euribor and was issued at 99.951.
Italian banks are less affected by sovereign debt fears than those of other Southern European countries such as Spain and Portugal, which should help their ability to issue debt, said analysts.
"As with all the Italian banks — Banca Populare di Vicenza's ability to issue in the capital markets will be less impacted by sovereign headline risk and volatility than Irish, Portuguese or Spanish banks, for example," said Tzschentke.
Floating rate notes (FRNs): are bonds that have a variable coupon, equal to a money market reference rate, like LIBOR or federal funds rate, plus a spread. The spread is a rate that remains constant.
Almost all FRNs have quarterly coupons, i.e. they pay out interest every three months, though counter examples do exist.
At the beginning of each coupon period, the coupon is calculated by taking the fixing of the reference rate for that day and adding the spread. A typical coupon would look like 3 months USD LIBOR +0.20%.
Par: The value that a share in a company had originally Banca Popolare di Vicenza: Banca Popolare di Vicenza (BPVI) was established in 1866.
For more than 140 years the Bank has been offering retail and corporate banking services. Its headquarters are located in Vicenza, in Italy.
Premium: an extra payment added to the basic rate
UniCredit: UniCredit is a major international financial institution with strong roots in 22 European countries and an international network present in approximately 50 markets, with 9,578 branches and more than 162,000 employees.
In the CEE region, UniCredit operates the largest international banking network with around 4,000 branches and outlets.
The Group operates in the following countries: Austria Azerbaijan, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Germany, Hungary, Italy, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey and Ukraine.
History
The group's origins date back over five centuries to the establishment of Rolo Banca in 1473, when Monte di Pietà, a public institute providing secured loans, was created in Bologna.
More recently, the UniCredit is the result of the merger of nine of Italy's largest banks and the subsequent combination with the German HVB Group and the Italian Capitalia Group.
Euribor: The Euro Interbank Offered Rate ‘EURIBOR®’, which is the money market reference rate for the euro.
European Bond Market: A public market (more details see another page)
Dealogic: provides a platform for investment banking and capital markets professionals globally to help improve strategy, competitiveness, and execution.
The platform incorporates technology, data, analytics and consulting to help investment banks better understand their clients and the competitive landscape so they can allocate resources and execute deals more effectively.
History
Dealogic was established in the UK in 1983 by Simon Hessel, Peter Ogden and Philip Hulme. In 1991 the Group acquired the assets of a US capital markets communications business headed up by Tom Fleming which provided the Group with an established customer base in the US securities industry.
Through carefully managed growth Dealogic now employs over 400 people and has offices in London, New York, Hong Kong, Tokyo and Sydney.
Due: When a sum of money is due, it must be paid immediately
Sovereign debt: A sovereign bond is a bond issued by a national government.
The term usually refers to bonds issued in foreign currencies, while bonds issued by national governments in the country's own currency are referred to as government bonds.
The total amount owed to the holders of the sovereign bonds is called sovereign debt.
Medium-term notes (MTNs): are debt securities with maturities that range from 9 months to 30 years or longer.
Tap: to choose sb to do a particular job
By Euroweek Reporter
Italy’s Banca Popolare di Vicenza sold a Eu155m floating rate note on Tuesday — its largest private placed bond since 2005 and its first outing in the market since March.
The three year note, dealt through Royal Bank of Scotland and sold at par, pays a coupon of 200bp over six month Euribor for the first two years, stepping down to 40bp over for the remainder.
Banca Popolare di Vicenza sold a Eu500m two year floating rate note in the public market late in September. That paid 155bp over three month Euribor and was sold at par.
"The 200bp coupon would be a decent premium on the two year FRN issued in September,” said Dietmar Tzschentke, bank credit analyst at UniCredit in Munich.
“That steps down to plus 40bp in May 2013 — the investor is betting that Euribor will go up in two years time to compensate for the step down in spread."
Aside from the Eu500m public deal sold late in September, this is the bank’s first outing in the European bond markets since March, when it sold a Eu120m floating rate private placement due 2012, according to Dealogic. That deal paid a coupon of 80bp over three month Euribor and was issued at 99.8.
It is also the issuer’s largest private placement since September 2005, when it sold a Eu300m two year floating rate note via HSBC, according to Dealogic. That note paid a coupon of 10bp over three month Euribor and was issued at 99.951.
Italian banks are less affected by sovereign debt fears than those of other Southern European countries such as Spain and Portugal, which should help their ability to issue debt, said analysts.
"As with all the Italian banks — Banca Populare di Vicenza's ability to issue in the capital markets will be less impacted by sovereign headline risk and volatility than Irish, Portuguese or Spanish banks, for example," said Tzschentke.
Floating rate notes (FRNs): are bonds that have a variable coupon, equal to a money market reference rate, like LIBOR or federal funds rate, plus a spread. The spread is a rate that remains constant.
Almost all FRNs have quarterly coupons, i.e. they pay out interest every three months, though counter examples do exist.
At the beginning of each coupon period, the coupon is calculated by taking the fixing of the reference rate for that day and adding the spread. A typical coupon would look like 3 months USD LIBOR +0.20%.
Par: The value that a share in a company had originally Banca Popolare di Vicenza: Banca Popolare di Vicenza (BPVI) was established in 1866.
For more than 140 years the Bank has been offering retail and corporate banking services. Its headquarters are located in Vicenza, in Italy.
Premium: an extra payment added to the basic rate
UniCredit: UniCredit is a major international financial institution with strong roots in 22 European countries and an international network present in approximately 50 markets, with 9,578 branches and more than 162,000 employees.
In the CEE region, UniCredit operates the largest international banking network with around 4,000 branches and outlets.
The Group operates in the following countries: Austria Azerbaijan, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Germany, Hungary, Italy, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey and Ukraine.
History
The group's origins date back over five centuries to the establishment of Rolo Banca in 1473, when Monte di Pietà, a public institute providing secured loans, was created in Bologna.
More recently, the UniCredit is the result of the merger of nine of Italy's largest banks and the subsequent combination with the German HVB Group and the Italian Capitalia Group.
Euribor: The Euro Interbank Offered Rate ‘EURIBOR®’, which is the money market reference rate for the euro.
European Bond Market: A public market (more details see another page)
Dealogic: provides a platform for investment banking and capital markets professionals globally to help improve strategy, competitiveness, and execution.
The platform incorporates technology, data, analytics and consulting to help investment banks better understand their clients and the competitive landscape so they can allocate resources and execute deals more effectively.
History
Dealogic was established in the UK in 1983 by Simon Hessel, Peter Ogden and Philip Hulme. In 1991 the Group acquired the assets of a US capital markets communications business headed up by Tom Fleming which provided the Group with an established customer base in the US securities industry.
Through carefully managed growth Dealogic now employs over 400 people and has offices in London, New York, Hong Kong, Tokyo and Sydney.
Due: When a sum of money is due, it must be paid immediately
Sovereign debt: A sovereign bond is a bond issued by a national government.
The term usually refers to bonds issued in foreign currencies, while bonds issued by national governments in the country's own currency are referred to as government bonds.
The total amount owed to the holders of the sovereign bonds is called sovereign debt.
Medium-term notes (MTNs): are debt securities with maturities that range from 9 months to 30 years or longer.
Tap: to choose sb to do a particular job
Subscribe to:
Posts (Atom)