10 de junio de 2015 / 21:26 / en 2 años

Lima Metro hogs limelight in soft market

NEW YORK, June 10 (IFR) - Softness in the credit market did not discourage Lima Metro Line 2 from adding to the recent surge in primary activity on Wednesday when it printed a US$1.155bn 19-year bond.

Lima Metro priced its bonds at par to yield 5.875%, the tight end of guidance of 6% area (+/-12.5bp). The deal was helped by US$700m in reverse enquiry, but demand grew to a little over US$2.5bn amid interest from crossover account and investors from other Latin American countries.

"I had clients asking about Lima Metro from different places, including Brazilian issuers who don't usually look outside the country," said a broker.

The bonds are backed by Peruvian government obligations that would cover any shortfalls in project collections, essentially eliminating construction and performance risks.

Peruvian projects have priced similarly structured deals before but not as large as this one.

The bonds, rated Baa1/BBB/BBB, have a weighted average life of 12.8 years. Investors were attracted by the pick up to the Peruvian sovereign curve, where the 2025s have been trading at 3.75%.

Secondaries, however, were putting in a mixed performance with sovereign debt prices continuing to fall as concerns about rate hikes in the US weighed on sentiment.

Brazil 2025s were closing at 95.55-96.00, marking a two point drop since the beginning of the month.

This comes on another day of rate volatility in the US, where yields on 10-year Treasuries hit 2.495%, their highest level since October last year.

In the Brazilian corporate space, however, names such as miner Vale and oil company Petrobras saw spreads holding in Wednesday, with the latter's Century bonds being quoted some 5bp tighter at 518bp.

The attractive yields in Brazil have been taking their toll on Chilean credits, which have looked expensive against recently issued bonds from Embraer, which was closing at 265bp compared to its 270bp new issue spread.

"Some Chilean issues were trading at 4% or even a 3% handle only because of their zip code," he said. "Clients have taken profits on those bonds and bought the Embraer deal."

Mexican state-owned utility CFE, which was forced to widen final pricing to 300bp over, was performing better than many credits to end the day at 99.50-100.00 or 294bp-291bp over.

PIPELINE

Salvadoran bank Banco Agricola, rated Ba2/BB+, has mandated Bank of America Merrill Lynch and Deutsche Bank to take it on the road to market a 144A/Reg S senior unsecured bond.

The borrower wrapped up marketing in Boston and New York today. Banco Agricola is 97.35% owned by Bancolombia, which is rated Baa2/BBB-/BBB.

Brazilian telecoms firm Oi is finishing marketing on possible euro 144a/Reg S bond. The Ba1/BB+BB+ rated firm has mandated BB Securities, BofA Merrill Lynch, HSBC, Santander, Bradesco BBI, Citigroup, Deutsche Bank, BNP Paribas, BTG Pactual and Itau BB to arrange the meetings. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)

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