Votorantim Cimentos breaks Brazilian issuance lull

viernes 8 de mayo de 2015 10:34 GYT

By Paul Kilby

NEW YORK, May 8 (IFR) - Votorantim Cimentos proved Thursday that Brazilian issuers once again have access to international debt capital markets, raising 500m in seven-year bonds and breaking an uneasy six-month primary market lull for the nation's issuers.

The cement company's journey to the markets began in earnest in late April after Petrobras removed a nasty overhang over Brazilian bonds by bringing out full-year audited results.

Petrobras's release of a clean sheet of results eliminated the threat of a technical default at the state-owned oil company and immediately sparked a rally in Brazilian credit.

Votorantim waited for the dust to settle before embarking on European roadshows, culminating in the trade last Thursday. But it still faced some significant headwinds.

The trade came against a tougher backdrop than expected - German bond yields experienced their largest weekly rise since mid-1999 - on the day of pricing.

Votorantim, rated Baa3/BBB/BBB, may have raised what it had intended, but some thought it paid too much for access and could probably have done better in US dollars.

The bonds launched at 310bp over the interpolated mid-swaps curve, or flat to earlier guidance, after leads watched demand reach a tepid 620m plus. Final pricing came at 98.542 with a 3.5% coupon to yield 3.737%, providing a 30bp pick-up to its existing euro-denominated 2021s, which were trading with a Z-spread of 283bp.

At 310bp over mid-swaps, the deal came at three-month dollar Libor plus 380bp, or some 80bp wide to the Libor plus 290bp-300bp that the company could have achieved on a new seven-year in US dollars, according to a syndicate manager.   Continuación...