UPDATE 2-Uruguay opts for size in larger-than-expected bond tap

lunes 23 de febrero de 2015 19:49 GYT

(Adds pricing details, quotes)

By Davide Scigliuzzo

NEW YORK, Feb 23 (IFR) - Uruguay picked size over tighter pricing Monday when it returned to the international bond markets with a larger-than-expected US$1.2bn reopening of its 2050 bond.

The deal marks the latest Latin American sovereign to take advantage of investor appetite for duration to raise long-term money ahead of possible rate hikes later this year.

The South American country, rated Baa2/BBB-/BBB-, increased the size of the deal by US$200m from the originally targeted US$1bn, but barely budged on pricing to come at a spread of 235bp over US Treasuries, essentially flat to initial talk of 235bp area.

At that level, the tap offered investors a 20bp concession over secondary market spreads on the existing notes, which on Friday were spotted at around 215bp over 30-year US Treasuries.

Despite the relatively generous premium, the sovereign likely faced some resistance from accounts who placed just over US$2bn in orders for the offering, said a banker away from the deal.

"They went for a larger size, but they increased only by US$200m and I am sure people were thinking it could end tighter," said the banker. "They probably had some push back from investors."

The sale, which priced at 101.394 to yield 5.014%, appeared to offer good value against regional peers.   Continuación...