25 de junio de 2015 / 20:51 / hace 2 años

Posadas prices rare junk bond in rocky day for LatAm

NEW YORK, June 25 (IFR) - Mexico's Grupo Posadas printed a rare junk bond on Thursday, marking Latin America's first sub-double B offering in three months.

Posadas, a hotel chain with brands such as the Fiesta Americana, priced a US$350m seven-year non-call four bond at par to yield 7.875%, the tight end of initial price thoughts of 8% area.

The region hasn't seen a corporate deal with such a low rating since YPF (Caa1/CCC) came to market in April, and many bankers had thought the deal would be a tough sell.

Posadas (B2/B/B+), which has struggled with debt burdens in the past, faces a somewhat brighter outlook as its hotel business should benefit from a stronger dollar and a recovering US economy, said a banker.

The bond is also thought to have enjoyed a nice underlying bid from a tender for its outstanding 7.875% 2017s, which this deal is financing.

"It is positive for the market to have a lower rated bond get done," said a banker. "Everyone has seen the Fiesta Americana in Cancun, so there is a comfort level and they paid a juicy premium on the tender."

Holders who tendered by July 24 received US$1,060 per US$1,000 principal amount. Thereafter but before final expiration of July 10, holders get US$1,030. Both those levels are higher than the 102.70 mid-market price seen on the bonds before the tender was announced on June 11.

However, finding comps for a single B name like Posadas proved tricky in LatAm where similarly rated credits are trading anywhere between 6.10%, as is the case with cement company Cemex's new 2025s, to the 14% secondary yield seen on Brazilian airline Gol's 2022s.

Market chatter had initial price discussions starting in the low 7%, closer to where Cemex trades, but accounts were thought to be looking for something higher.

"Cemex is mis-rated as a single B, and Posadas is a true single B, but even in the low 7% it still looks cheap," said a trader.

Meanwhile, Brazilian credit prices were off their lows after sinking earlier on Thursday on news that former President Luiz Inacio Lula da Silva had sought legal protection to avoid unlawful arrests connected with corruption investigation at state-owned oil company Petrobras.

"Things have stabilized and we are finding buyers across the curve," said the trader.

Brazil 2025s were closing the day some 90 cents lower at around 96.00-96.50, but were off a low of around 95.50.

PIPELINE

Peruvian development bank Corporacion Financiera de Desarrollo SA (COFIDE) has mandated Citigroup, Morgan Stanley and Standard Chartered to roadshow a possible US dollar 144A/RegS bond sale.

The borrower, rated BBB+/BBB+, will start meeting investors in Los Angeles on Thursday and head to Boston on June 26, London on June 29 and wrapping up in New York on June 30.

Banco Santander Chile has mandated Deutsche Bank and Santander to arrange global fixed-income investor meetings to discuss opportunities in the domestic Chilean markets.

The bank, rated Aa3/A/A+, will be in London on July 6, in Boston on July 7, in New York and nearby on July 8 and 9, finishing up in Los Angeles on July 10.

Jamaica, rated Caa2/B/B-, has wrapped up roadshows via Citigroup. The meetings were described as a non-deal roadshow, but markets have been expecting the sovereign to raise funding to retire a PetroCaribe loan owed to Venezuela. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)

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