NEW YORK, June 18 (IFR) - AES Panama cut a lonely figure as it came with the only LatAm bond deal Thursday, despite expectations of a new surge in supply after the Fed's dovish statements yesterday.
The backdrop for issuance was relatively benign, as US stocks rallied and sentiment was buoyed by hopes that financial aid to Greece would be extended until year-end.
"The equity market is ripping and the FOMC statement was perceived as dovish," one syndicate official told IFR. "That is a nice backdrop for the market."
But AES Panama got the market's full attention as other borrowers were heard waiting for either better secondary levels or several more days of stability.
The risk of any spillover from Greek debt talks is also a concern.
The Panamanian utility, rated BB-/BB+, priced a US$300m seven-year at par to yield 6% after books peaked at around US$850m.
That was at the tight end of guidance of 6.125% (+/-12.5bp) and inside of initial price thoughts of low-to-mid 6s.
After AES Panama, the Jamaican sovereign and Mexican hospitality company Grupo Posadas are the only borrowers visible in the pipeline.
Some bankers think junk-rated Grupo Posadas might try its luck with a liability management transaction in an effort to retire its 7.875% 2017s, which is callable in November.
The company made a similar move in late 2012, when it issued the 2017s to retire its 9.25% 2015s. The 2017s have been trading at 105.25-105.50 or at a yield of 4.60% to the first call, according to one banker.
"I would think investors would want to see them term out that bond," the banker said.
"I am note sure if they would get a smaller coupon, but terming out debt is more important for these guys than saving 50bp."
Elsewhere, Pacific Rubiales's 2025s slipped another half a point to 78.50-79.50 following news that O'Hara Administration Co, which holds about 20% of the company, has begun a proxy fight to prevent a takeover by Alfa and Harbor Energy.
Argentine bonds also continued to trade heavily, though they were recovering from their lows, with the Bonar 2024s being quoted at 96.00-96.65.
The bonds fell yesterday after presidential candidate Daniel Scioli's selected Carlos Zannini - a close confidant of incumbent President Cristina Kirchner - as his running mate.
Grupo Posadas is poised to kick off roadshows this week through Citigroup, Bank of America Merrill Lynch and JP Morgan ahead of a possible USD 144A/Reg S bond sale.
The company, rated B2/B/B+ by Moody's/S&P/Fitch, will start investor meetings in Los Angeles on Friday. Next week, it will see accounts in London on June 22, in Boston on June 23 and in New York on June 24.
The Government of Aruba, rated BBB+ by S&P and BBB- by Fitch (both stable), has mandated Credit Suisse and Raiffeisen Schweiz to lead a roadshow in Switzerland this week.
The Caribbean island is a part of the Kingdom of the Netherlands. The deal is "supervised" by the Netherlands but does not have an explicit guarantee.
Jamaica has started investor meetings via Citigroup. The country, rated Caa2/B/B-, saw accounts in New York today and will then head to Boston (June 19), London (22), Germany (23) and wind up in Amsterdam on June 24.
Meetings are being described as a non-deal roadshow, but markets have been expecting the sovereign to raise funding to retire a PetroCaribe loan owed to Venezuela. (Reporting by Paul Kilby; Editing by Marc Carnegie)