NEW YORK, July 29 (IFR) - A peso bond from Mexico’s Telesites had the market’s full attention on Wednesday, injecting some life into the region’s moribund primary markets.
The cell tower spinoff of telco America Movil is poised to raise its targeted Ps15bn after launching a Ps3.5bn 10-year at Mbonos plus 190bp, a Ps4.5bn floater at TIIE plus 50bp, and an inflation-linked 15-year at 155bp over the government Udibono curve.
But the smaller size on the Euroclearable tranche aimed at foreigners underscored uncertainty over an asset class hit by the recent slide in the Mexican peso and broader dissatisfaction over the illiquidity of such instruments.
With America Movil’s Global peso 2024 bond trading at around 135bp over Mbonos, some also thought the pricing somewhat ambitious.
“It looks tight when taking into account the ratings differentials between America Movil (A2/A-/A-) and Telesites (BBB-/BBB-) and the fact that it is a new name,” said a banker away from the deal.
Meanwhile in the secondary market, Brazilian assets were largely enjoying some tightening despite S&P revising its outlook to negative on 30 corporate names from that country.
The move follows the rating agency’s decision on Tuesday to assign a negative outlook to the sovereign’s BBB- rating, setting it on a path for a possible demotion to junk.
The 2024s of state-owned oil entity Petrobras were some 8bp tighter at 502bp, while bank names such as BTG Pactual and Banco do Brasil were also better bid, according to one trader.
“People were expecting bad news and jumped in to buy, but that window doesn’t last long,” he said.
Meanwhile, miners were also making a comeback on Wednesday. Chilean copper producer Codelco was trading some 25bp-30bp inside recent wides, with the 2044s being quoted at 230bp.
It was a similar story for Southern Copper, whose 2045s were being quoted at 371bp.
Sagicor Financial, an insurance and financial services provider with operations in the Caribbean and the US, hired JP Morgan and Scotiabank to arrange fixed-income meetings in the US and Europe ahead of a potential USD-denominated 144A/Reg S bond issue.
Expected corporate ratings are BB-/B from S&P/Fitch.
Whispers of mid 6% are being heard on a US$750m 7NC3 from Sable International Finance Limited (Cable & Wireless), with pricing expected this week via BNP Paribas, JP Morgan, RBC and Scotiabank. Expected ratings are Ba3/B.
Brazilian conglomerate Cosan Overseas has wrapped up roadshows a week after marketing a possible 144A/Reg S bond offering. Bank of America Merrill Lynch, Bradesco, Itau BBA, Morgan Stanley and Santander organized the meetings. Expected ratings are Ba2/BB/BB+ by Moody‘s, S&P and Fitch. (Reporting by Paul Kilby; Editing by Marc Carnegie)