3 de agosto de 2015 / 20:43 / hace 2 años

LATAM WRAP-Sagicor takes center stage in quiet primary market

NEW YORK, Aug 3 (IFR) - Insurance company Sagicor cut a solitary figure in Latin America's moribund primary market on Monday as it released price thoughts of low 9s on a US$320m seven-year non-call five.

The deal from Sagicor, which provides insurance and financial services in the Caribbean and the US, is being marketed to both EM and US high-yield accounts.

But its Barbados postal code has some analysts comping it against Caribbean sovereigns and other regional credits.

At current IPTs, the deal is seen as cheap in light of a potential upgrade over the coming months as the company relocates from Barbados (B3/B) to a higher-rated country such as Trinidad, which is rated Baa2/A.

"It is likely the bond issues might be upgraded to the BB-/BB range," Omar Zeolla, an corporate credit analyst at Oppenheimer, wrote on Monday.

The company's ratings have fallen along with the fortunes of Barbados, which has suffered multiple-notch downgrades in recent years as its fiscal health deteriorated in the wake of the global financial crisis.

"They are devoting new capital to Trinidad and the US and they are trying to grow away from lower-rated countries," said a banker.

Other positives include strong interest coverage of more than seven times, as well as conservative reserve and risk-management practices, said Zeolla.

The issuer arguably could wait for the upgrade to refinance a bond maturing in May next year, but timing on any ratings action is uncertain, as is a potential US rate hike.

"It seems better to push out the maturity now than run the risk of a few basis points and not have a market," said the banker.

For now, initial talk puts the deal considerably wider than debt issued by Jamaica (Caa2/B), which has 8.5% 2021s and 7.625% 2025s trading at yields of around 5.30% and 5.90%, respectively.

Zeolla sees the bond settling somewhere around the 8% area, more in line with other regional borrowers such as utility AES.

The 2020s issued by AES's Dominican unit (B+/B+) and its El Salvadoran 2023s (B+/Ba2) are respectively trading at yields of around 8% and 7.4%.

An 8% yield would also put Sagicor closer the 8.25% pricing achieved on a eight-year issued by US insurer Alliant Holdings (Caa2/CCC+) last month.

The new deal, which is expected to price on Tuesday, may well be the last bond sale out of the region before the traditional rush to market in September.

Telesites, the cell tower spin-off of America Movil, had been expected to follow a recent peso deal with a US dollar tranche as well.

But the borrower is thought to have put any dollar transaction on hold for now, given the relatively unattractive costs versus a local currency issue. (Reporting by Paul Kilby; Editing by Marc Carnegie)

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