YPF squeezes pricing on bond as order books swell

viernes 18 de marzo de 2016 11:31 GYT

By Paul Kilby

NEW YORK, March 18 (IFR) - Argentina oil company YPF was set to raise US$1bn through a five-year bond on Friday, wrapping up its funding needs for the year and getting in ahead of a multibillion dollar deal from the sovereign.

With books reaching north of US$3bn, leads were able to squeeze pricing by 37bp from start to finish before launching the bond at a final yield of 8.5%, inside guidance of 8.75% (+/- 12.5bp).

At that level, the new five-year bond, rated Caa1/CCC+, is seen coming flat to 12bp wide to fair value along the company's interpolated curve, where the 2018s and 2025s have been trading at 7.65% and 9.125%, respectively.

The bonds were already being quoted in the grey market on Friday at plus 0.5-0.75 after reaching a high of plus 1.00 earlier in the session, according to a New York based trader.

Optimism over the prospects for the South American country as the government nears the end of an over 10-year legal battle with holdouts has buoyed appetite for Argentina assets.

This week's jump in crude prices to above US$40 a barrel no doubt also helped bolster interest in the Argentina oil company.

But concerns about pending supply have capped any upside as the sovereign prepares an up to US$12bn multi-tranche bond sale for next month to make good on payments promised to holdout investors.

"This is an appetizer before the main meal," said one banker away from the trade.   Continuación...