Argentine lemon grower San Miguel and sugar producer Ledesma said they will seek to raise funds in the local bond market this week, following recent deals by grain producers Cresud and MSU.
San Miguel said it wants to raise up to $65 million in a sale of sustainability-linked bonds, starting the offer at $10 million and increasing it to as much as $65 million based on demand at the auction on Thursday, according to a securities filing.
The Buenos Aires-based company said it will offer two series of two-year notes. One series will be denominated in US dollars paying a fixed rate of interest to be set during the bidding process. The second series will be a dollar-linked note paying a margin over currency depreciation also to be determined in the auction.
The SLBs will pay a step-up rate of between 50 and 100 basis points if the firm fails to meet its goal of reducing greenhouse gas emissions by expanding its use of renewable energy within 15 months, the firm said. The key target, it added, is to increase the share of renewable energy used at its processing plant in Famalillá, Tucumán to 74% by July 31, 2025, up from 71% at the end of 2023 and 57% at the end of 2022.
Santander and Galicia are organizing the deal and providing bookrunning services along with TPCG, Consultatio, Banco Provincia, Puente Hnos., Latin Securities, StoneX, Facimex, IEB Invertir en Bolsa, Cohen, Balanz, Mills Capital Markets, Adcap and Bull Market Brokers.
San Miguel said it will use the proceeds for working capital and to refinance debt.
It will be the firm’s first bond deal overseen by Pablo Ferrari, who took over as CFO in May after running the finances for 10 years at Boldt, a local casino and technology company.
In September last year, San Miguel raised $33.6 million in a reopening of dollar-linked SLBs in the local market to pay 5% over currency depreciation. The company has been selling more SLBs to improve its environmental performance by reducing emissions and water consumption while also stepping up the recycling and reuse of waste.
LEDESMA BETS ON PESOS
Lesdesma, for its part, aims to raise up to $30 million in the sale of a nine-month peso-denominated bonds for working capital and to refinance debts.
The company, which is Argentina’s biggest sugar producer, will start the offer at $20 million and increase it based on demand at the auction on Tuesday. The notes will pay a margin over Badlar, a local reference rate now at 38%.
Santander, Galicia, Macro and BBVA are the deal managers and will do the bookrunning along with Balanz, Banco Patagonia, Banco Mariva, Zofingen Securities, SBS Trading and Banco Comafi.
Meanwhile, MSU, another leading agribusinesses, said it issued $33.5 million worth of three-year, US dollar-denominated notes last week to yield 7.5%. The deal followed Cresud’s sale of $28.6 million worth of three-year, dollar-linked bonds priced to pay 1.5% over currency depreciation.
Galicia organized MSU’s deal as a bookrunner along with Balanz, Santander, Puente Hnos., BST and Adcap.