LATAM WRAP-Jamaica files bond shelf while Brazil credits suffer
By Paul Kilby
NEW YORK, July 21 (IFR) - A Jamaica bond filing and weakness in Brazilian credits on Tuesday were the main focus of attention in a LatAm credit market that has shifted into slow gear as August approaches.
An up to US$3bn SEC shelf from Jamaica, rated Caa2/B/B-, heightened expectations that it would issue bonds soon to retire an equivalent amount of PetroCaribe debt owed to Venezuela.
The government is expected to buy back the approximately US$3bn in debt at a steep discount - at somewhere between US$1bn-US$1.5bn - to make the transaction economical at a time when its 10-year bond is trading at around 5.75%.
As a result, the government hopes to shave some 10 percentage points from its debt-to-GDP ratio, lowering it to around 123% from 133%, according to one analyst
Citigroup recently finished taking the borrower on roadshows and is expected to lead any bond issue that may emerge over the next week or so.
The sovereign is one of the few borrowers left in a pipeline that also includes Brazilian conglomerate Cosan and America Movil's cellular tower spinoff Telesites.
Telesites is expected to prioritize an up to Ps15bn local currency offering that could come as soon as next week - and may follow that trade with a dollar bond sale as well.
Domestic investors are heard doing their credit work and getting approvals on what is still a new company. Continuación...