Argentine issuers jostle for attention in crowded market

jueves 14 de julio de 2016 14:34 GYT

By Paul Kilby

NEW YORK, July 14 (IFR) - The steady supply of Argentinian bonds to the US dollar primary markets continued on Thursday with Banco de Galicia y Buenos Aires, Petrobras Argentina and CLISA announcing the sale of close to US$1bn of new paper.

Thursday's deals largely received a positive reception in the current risk-on environment despite signs of indigestion after some US$6bn in Argentine supply in June.

Banco de Galicia, rated B3/B-, tested the waters with a US$250m 10-year non-call five - the country's first-ever Basel III compliant, Tier 2 bond. The bond is expected to be rated Caa1/CCC.

The deal drew a decent crowd as investors sought to gain exposure to one of the country's largest banks and to a sector that is likely to benefit from President Mauricio Macri's market friendly policies.

Price discovery was somewhat tricky however, given the lack of comparables in Argentina and elsewhere in Latin America.

"Current price talk is certainly aimed toward compensating investors for this uncertainty, but it is hard to say where this deal will settle longer term given its unique nature," said Jason Trujillo, an analyst at Invesco.

Indeed, leads Deutsche Bank and JP Morgan were able to ramp in pricing from very high 8% to a final yield of 8.25%. They still offered however a decent pick up to the sovereign's 2021s and 2026s that were trading at 5.09% and 6.25%, respectively.

Other Argentine banks are likely to follow with loss absorbing Basel III capital deals as the country's economy starts to grow and financial institutions begin to lend more.   Continuación...