Taking up the torch of export-related issuance in Argentina, a leading tobacco processor funds this week. The one-year, US$12.4 million deal might lend some heat to a sector that's gone cold over the last few months.
The country's largest tobacco exporter, Cooperativa de Tabacaleros de Jujuy (CTJ), is securitizating receivables and using the funds to purchase tobacco from affiliated producers. The company's base of operations in the tropical Northwest province of Jujuy is a hotspot for the crop.
The structurer, lead manager and trustee of the transaction are units of state-owned Banco de la Nacion Argentina. The bank is focused on stimulating regional economies, hence its interest in tobacco growers in the far-flung province, which is closer to many cities in Chile, Bolivia and Peru than to the capital of Buenos Aires. Cohen is co-managing the deal.
Proceeds will go to purchasing tobacco from affiliated farmers. CTJ processes the raw material into different blends typically from December to early April. Exports ensue in May. To push its product abroad, CTJ either sells to one of a group of huge international dealers, such as British American Tobacco or Philip Morris, or to a smaller distributor. The current transaction securitizes contracts with the latter, including Premium Tobacco Argentina, S.E.I.T.A.-Altadis, Heins Giesecke and Veneto. These clients represent 50% of CTJ's sales. The company is seeking to bolster its relationship with this group as a way to weaken its dependence on the mega-marketers, according to a report by Fitch Ratings.
Fitch rated the deal A-(arg)' on the national scale. The contracts in the trust represent an estimated US$17.6 million in sales, lending the deal a healthy overcollateralization. Final legal maturity is one year. Legal counsel for the transaction is Fretes & Arieu.
Launch for the tobacco bond might come as early as this week, according to a source close to the deal. Regulators have already given the go-ahead.
Also in the export sector, Banco de Valores was timed to close on Feb. 20 a US$3 million deal designed to benefit soy, bean and corn farmers as originators. Local agency Garantizar is the structurer.
Meanwhile, in the more animated consumer-loan asset class, Consubond XXII closed Feb. 11, with a Ps18 million (US$6.1 million) senior tranche pricing at 5.42%. Fitch rated the deal AA-(arg)', a notch above other deals in the Consubond series. The expected life is 11 months and the collateral is comprised of loans originated by Banco Saenz. Up ahead is Confibono III. Fitch has rated its Ps16 million (US$5.4 million) senior tranche A+' on the national scale. Consumer loans generated by Bazar Avenida and Consumo S.R.L. provide collateral for the deal. The last issue off the Confibono program came in December.