LATAM WRAP-Panama Canal Authority makes debut in tough markets
By Paul Kilby
NEW YORK, Sept 24 (IFR) - The Panama Canal Authority defied poor sentiment on Thursday when it printed a US$450m 20-year debut bond tight to the sovereign despite a particularly rocky day for emerging markets.
The single A rated operator of the Panama Canal cut a solitary figure in the moribund US high-grade primary market where much of the paper was placed.
The credit, rated A2/A-/A, was largely marketed to US municipal analysts and high-grade infrastructure players who understood such structures and saw value in the name.
Emerging markets accounts accustomed to pricing quasi sovereigns with a pick up to government paper thought IPTs of Treasuries plus 230bp was far too tight for their liking.
At that level, the operator of the Panama Canal was offering just 35bp over where a new Panama 20-year would come, according a syndicate official away from the deal.
That compares to the approximate 75bp differential between Mexican state-owned utility CFE and Mexican sovereign paper - one of the tightest sovereign to quasi sovereign spreads in the LatAm space.
Pricing at 98.232 to yield 5.096% or Treasuries plus 220bp, the deal was comped largely against similarly rated US high-grade bonds that were printed this month.
This includes Applied Materials, A3/A-, which printed a 2035 bond at a slightly tighter spread of 210bp, but higher yield of 5.127%. Continuación...