Banco de Bogota out with split-rated sub debt bond

lunes 9 de mayo de 2016 14:12 GYT

By Paul Kilby

NEW YORK, May 9 (IFR) - Banco do Bogota announced a Tier 2 10-year bond on Monday as it sought to tackle weaker capital ratios in the wake of a steep devaluation of the Colombian peso over the last year.

At guidance of 6.5% (+/- 12.5bp), the subordinated trade was seen coming some 100bp wide to the bank's existing subordinated 2023s, which were trading at around 5.5%.

Leads and other bankers put fair value on a new 10-year at 6.00%-6.125%, meaning a concession of around 37.5bp-50bp at mid 6s or 25bp-37.5bp at the tight end of guidance.

"It doesn't have a ton of juice, so the question is how much will they tighten?" said a DCM banker away from the deal.

The borrower was heard targeting around US$500m-US$600m in size after amassing some US$1.3bn in demand, putting it short of the up to US$1bn size telegraphed by the rating agencies.

The deal, rated Ba2/BBB by Moody's and Fitch, should find an audience among international investors who like Colombia's second-largest bank.

But the likely lack of local participation gave at least one trader pause.

"I like the name, as it is Grupo Aval's cash cow," the trader said.   Continuación...