Brazilian credits lead surge in primary markets

miércoles 20 de mayo de 2015 12:00 GYT

By Paul Kilby

NEW YORK, May 20 (IFR) - More Brazilian borrowers sallied forth on Wednesday to take advantage of what remains a positive backdrop for the region.

Brazilian food company BRF, rated Baa3/BBB/BBB-, hired BNP Paribas, Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Morgan Stanley and Santander to market a rare euro-denominated Green bond to European accounts next week.

While this may not be the first Green bond from Latin America - Peruvian wind farm Energia Eolica printed one late last year - the deal underscores how an increasing number of the region's borrowers are looking to develop this market.

"We are not at the stage of development in the Green bond market where it will offer pricing differentials (for Latin American borrowers)," said an EM syndicate official. "But as liquidity improves that should happen."

At the same time, BRF Foods, which was created in 2009 from the merger between Sadia and Perdigao, is targeting some US$1.13bn in outstanding bonds as part of a cash tender for its 2017s, 2020s and 2022s.

At a tender price of 113.75 on the 5.875% 2022s, the borrower is seen offering a generous premium to the 111.0-112.00 secondary price seen earlier this week.

"We have had clients asking about BRF," said a trader. "It is a nice pick up on price and investors can definitely find opportunities to get better paid in Brazil's investment grade market."

BRF was seen as one of the few credits that better withstood downward price action caused by the corruption scandal swirling around Brazilian state-controlled oil company Petrobras.   Continuación...