Votorantim breaks lull in Brazilian issuance

jueves 7 de mayo de 2015 10:55 GYT

By Paul Kilby

NEW YORK, May 7 (IFR) - Votorantim Cimentos printed a EUR500m seven-year bond on Thursday, defying an ongoing rout in global rates to become the first Brazilian issuer this year to sell international bonds.

Still, the Brazilian cement company barely budged on pricing in what has been a tough environment in Europe, launching at 310bp over the interpolated mid-swaps curve or flat to earlier guidance.

This comes after German bond yields Thursday suffered their largest weekly rise since mid-1999.

"It is bad luck in terms of timing," said a senior banker. "Any Brazilian issuer that has been looking at euros may be thinking twice now. It may be hard to make an argument that there is a clear benefit to doing euros over dollars."

In the end, the bond, rated Baa3/BBB/BBB, was priced at 98.542 with a 3.5% coupon to yield 3.737%.

That said, the deal is significant mostly because it marks the first Brazilian issuer to venture into the international capital markets this year and it could encourage others to follow suit in a dollar market that has proven resistant to the recent sell-off in US Treasuries.

"Even with the Treasury sell-off over the past few weeks, our space hasn't got hit," said a syndicate official. "Our market is in good shape."

Meanwhile, news that Chilean President Michelle Bachelet is reshuffling her cabinet in an effort to address her sinking popularity has thrown into question the timing of a long-expected bond sale from the sovereign, bankers said.   Continuación...