NEW YORK, April 22 (IFR) - Brazil names led LatAm credit spreads tighter Wednesday as the region’s bond prices held their own against rising yields in the US Treasury market.
Brazilian iron miner Vale proved to be the outperformer as its curve tightened by as much as 20bp with 2020s and 2040s closing at 295bp-284bp and 400bp-395bp, respectively.
News that rival BHP Billiton had deferred spending in its iron ore division raised hopes that the commodity may soon see a reversal in recent price declines, and help Vale gain market share.
Elsewhere in Brazil, bonds issued by oil company Petrobras were flat to a touch tighter ahead of the expected release of full-year audited financial results later this afternoon.
The 2024s were closing unchanged at around 450bp-440bp, while the 2044s were ending about 3bp tighter at 478bp-468bp.
In other parts of the region, bonds issued by Colombian quasi sovereign utility Empresa de Energia de Bogota (EEB) jumped after the company announced today that shareholders had authorized an up to US$1.5bn local and international bond offering to refinance US$749m in outstanding 6.125% 2021s.
The 2021s gained about 20bp on the news to close at 107.75-108.75, according to the trader.
In the sovereign space, Bonar 2024s ended the day lower at mid-market price of around 103.75 after holdout investors suing the sovereign asked US courts to force Argentina, Deutsche Bank and BBVA to disclose details on a US$1.416bn sale of those instruments.
This comes as Argentine oil company YPF saw order books swell to around US$4bn on a new 10-year bond, which is now offering guidance of 8.75% (+/- 1/8), tight to initial talk of 9% area.
At the mid-point of guidance, the deal is offering an attractive 60-65bp pick-up to its existing 8.75% 2024s, which were earlier being quoted in the 8.10%-8.15% range.
It also may provide some value against regional peer Petrobras, holders of which have enjoyed a considerable rally over the last month.
The 2024s issued by the Brazilian credit are now trading at around 6.26%, tightening from 8.09% seen in mid-March when YPF’s own 10-year was trading at a yield of 8.35%.
Now may be the time to sell Petrobras and buy YPF, given that the spread differential between the two oil credits has widened from around 30bp in March to about 250bp, said Michael Roche, EM fixed-income analyst at the Seaport Group. The YPF trade prices on Thursday.
Banco de los Trabajadores (Bantrab) will hit the road next week to market a possible subordinated debt offering through Deutsche Bank.
The Guatemalan bank, which focuses on payroll-lending to public sector employees, is approaching investors with an up to US$100m 10-year subordinated loan participation notes, which are being recognized as Tier 2 capital by local regulators.
It was in Switzerland today and will head to New York on the 23rd and Miami on the 24th. The bank carries corporate ratings of Ba3/BB- by Moody’s and Fitch.
ACI Airport Sudamerica, controlling shareholder of the concessionaire of Uruguay’s Carrasco airport, mandated Bank of America Merrill Lynch and Nomura for investor meetings that concluded last week in London and Los Angeles.
A potential senior secured 144A/Reg S deal backed by future dividends from a long-term airport concession contract may follow.
Empresa Electrica Guacolda S.A. (Guacolda) has kicked off roadshows as it markets a senior unsecured 144A/Reg S USD bond. The borrower mandated Citigroup, GS and Itau as global coordinators, while Scotiabank is joint bookrunner.
The company is marketing a US$500m 10-year bullet bond. Proceeds from the bonds, and a five-year amortizing loan are going to refinancing the company’s outstanding debt.
It wrapped up roadshows in New York today. Guacolda is owned 50% plus 1 share by AES Gener (Baa3/BBB-/BBB-), while the remainder is held by infrastructure fund Global Infrastructure Partners. Expected ratings are BBB-/BBB-.
Pacific Rubiales, the largest private oil producer in Colombia, has kicked off investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC. The company heads to Santiago on April 30, Los Angeles on May 4 and Miami on May 6. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)