DomRep scores a home run with US$1bn dual-tranche tap

jueves 30 de abril de 2015 17:07 GYT

By Paul Kilby

NEW YORK, April 30 (IFR) - The Dominican Republic scored a home run on Thursday raising US$1bn through a dual-tranche bond reopening that was priced with just 5bp to 12.5bp in new issue premium.

The Caribbean oil importer's bonds, rated B1/B+/B+ (Moody's; S&P; Fitch), attracted about US$2.5bn in orders from investors keen to take exposure to a sovereign that benefited from this year's dramatic declines in crude prices.

Priced with a yield of 5.125%, the US$500m reopening of 5.5% 2025s came with a premium of around 12.5bp against the 5% mid-market quotes for the older bonds in the secondary market earlier on Thursday.

Meanwhile, the longer-dated US$500m reopening of the 6.85% 2045s, which was priced at 6.5%, came at an even tighter concession of just 5bp versus older bonds quoted at 6.45%.

"It is a story that people like," said a US-based investor. "Tourism numbers are growing at double digits and lower oil prices have helped them a lot."

The country's economy enjoyed 7.3% growth rate last year and is expected to expand another 5% in 2015, according to Lucila Broide, director of emerging markets fixed-income at Oppenheimer & Co.

The deal is a reopening of bonds originally issued as part of a US$2.5bn sale in January, the country's largest ever bond sale.

Proceeds on that occasion were largely used to retire a US$4bn PetroCaribe loan by paying Venezuelan state-owned oil company PDVSA just US$1.93bn.   Continuación...