Chile breaks lull in LatAm primary markets

martes 12 de enero de 2016 12:48 GYT

By Paul Kilby

NEW YORK, Jan 12 (IFR) - Chile (Aa3/AA-/AA+) was poised to become the first Latin American issuer to sell cross-border bonds in 2016 on Tuesday, breaking the lull in what has been a quiet start to the year for the region's primary market.

The South American nation, which was selling both euro and dollar bonds on Tuesday, is the highest rated sovereign in Latin America and hence seen as an ideal candidate to open the way for other regional borrowers which have been sidelined by global volatility.

Chile launched a EUR1.2bn 10-year at mid-swaps plus 110bp, the tight end of guidance of plus 115bp (+/-5bp) and a good 10bp inside initial price thoughts of 120bp area.

At the same time, the sovereign is testing buyside appetite with initial thoughts of US Treasuries plus 140bp on a new 10-year dollar bond, that is being done in combination with a tender for outstanding debt.

At 110bp over, the euro issue is seen coming with a 23bp-30bp concession to the curve after accounting for the extension from the existing 2025s, which were trading with a spread of between 75bp-82bp, said bankers away from the deal.

Bankers close to the deal were putting the new issue concession on the euro trade nearer 15bp after watching books reach close to EUR2.5bn earlier Tuesday.

At 140bp over US Treasuries, the dollar deal is also starting with a 35bp-40bp premium to the secondary curve, where the existing 2025s are being spotted with a G spread of anywhere between 100bp-105bp, according to the banker away from the deal. By late morning, books were heard breaching the US$1.8bn mark.

"They are starting conservatively for a single A issuer, but it reflects the reality of the market," said the banker away from the deal.   Continuación...