Argentina's Banco Hipotecario preps post-election bond

martes 10 de noviembre de 2015 13:06 GYT

By Paul Kilby

NEW YORK, Nov 10 (IFR) - Banco Hipotecario could be the first borrower to test appetite for Argentine risk following the presidential election this month as the mortgage bank seeks to fund a debt buyback.

The borrower could move forward with the five-year bond sale as soon as November 24, when a cash tender for its outstanding 9.75% 2016s expires.

That is just two days after the much-anticipated run-off election between market favorite Mauricio Macri and ruling party candidate Daniel Scioli.

Argentina bond prices have surged in recent weeks in anticipation of a Macri victory, but timing on the deal will depend on market reaction to the results, said a source.

The bank is offering a buyback price of 102.50 on a bond that has been trading at around 101.25 in recent days.

Moody's has assigned a foreign currency rating of Caa1 on an issue that could be anywhere between US$200m and US$500m in size.

"Despite the bank's satisfactory financial fundamentals, including strong capitalization, the Caa1 rating is constrained by Argentina's challenging operating environment," it said.

Moody's points to the bank's strong asset quality and a non-performing loan ratio of 1.9%, but said that a heavy reliance on wholesale funding exposes it to refinancing risks.   Continuación...