UPDATE 2-Paraguay launches bond, its first in almost a year

miércoles 23 de marzo de 2016 14:17 GYT

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By Natalie Harrison

NEW YORK, March 23 (IFR) - The Republic of Paraguay launched a bigger-than-expected US$600m 10-year bond on Wednesday, its first dollar offering in almost a year which will finance new investments and refinance existing debt.

Bank of America Merrill Lynch and Itau upsized the deal by US$100m and pulled in pricing by 37.5bp, launching the trade at a yield of 5% or tighter than initial price thoughts of 5.375%, a lead on the deal told IFR.

One investor that bought the bond put the new issue concession at 35-40bp, and said orders were in excess of US$3bn according to the latest details sent out to market participants by the leads.

The bond is expected to price later on Wednesday, a day after the leads began marketing through calls involving Finance Minister Santiago Pena and Central Bank Governor Carlos Fernandez Valdovinos.

Paraguay, rated Ba1/BB/BB, was last in the market in April 2015, when it tapped the 4.625% 2023s at a yield of 4.15% and reoffer price of 103.11 through bookrunners Bank of America Merrill Lynch and JP Morgan.

Those bonds have been trading with a dollar price of 101.00-102.00 or a yield of 4.45%-4.28%, according to Thomson Reuters data, or at a G-spread of around 270bp, according to the investor.

"The standard high-yield NIC has been coming at about 40bp, and this level is commensurate with that," said Sean Newman, a senior portfolio manager at Invesco Fixed Income who oversees emerging market and government bonds.   Continuación...