Brazil's BRF makes successful debut despite shaky backdrop

viernes 29 de mayo de 2015 15:01 GYT
 

By Paul Kilby

NEW YORK, May 29 (IFR) - Brazilian food company BRF's debut euro bond topped off a slow week in the Latin American primary markets.

A rally in US rates Friday and a rebound in oil prices Friday as the US dollar sunk set a positive backdrop for the region and EM overall, but investors remain risk averse.

"A lower dollar and rallying US rates are good for emerging markets, but sentiment remains shaky," said a New York-based syndicate official.

Investors also seem to be holding judgment on Brazil following data that showed a 0.2% drop in first quarter growth and a larger 1.6% decline year on year.

While those numbers were better than some expectations, the outlook for the region's largest economy looks dim amid monetary and fiscal tightening.

"We believe the outlook for growth in Brazil remains quite bleak: the fiscal consolidation is already showing its impact on activity, and we believe that the Copom strategy for monetary policy will hurt growth conditions even further," said Barclays.

This follows BRF's debut in the euro market on Friday - a 500m seven-year bond that saw demand peak at more than 2bn.

Starting with initial price thoughts of the mid-swaps plus 240bp area, the issuer was able to squeeze guidance to plus 230bp (+/-5bp) before pricing the 2.75% seven-year at 99.548 to yield 2.822%, or mid-swaps plus 225bp.   Continuación...