Paraguay defies Argentina worries with new bond
By Davide Scigliuzzo
NEW YORK, July 28 (IFR) - Paraguay decided to test LatAm resilience Monday, roadshowing a new bond as the market swirls around a looming debt default by Argentina.
Rated Ba2/BB/BB-, Paraguay will kick off investor meetings Tuesday, just a day ahead of a deadline for its neighbor to plunge into its second default in a decade.
Bankers and investors both said they expected no contagion from events in Argentina, where the sovereign is locked in a bitter battle with holdout creditors.
"Paraguay is a trading partner of Argentina and the two countries are of course close geographically," said Carl Ross, head sovereign analyst at Boston-based asset managers Grantham Mayo van Otterloo.
"But the market is looking at Argentina as an isolated situation."
At worst, traders expect an Argentine default to lead to some weakening in the region's secondary market bond prices.
Paraguay should be able to price the new issue not far off its only international bond outstanding - a 4.625% US$500m 2023 note issued in early 2013.
That note was quoted at a cash price of around 101.5 mid-market, equivalent to a G-spread of around 220bp and a yield of 4.50%. Continuación...