May 17, 2016 / 9:17 PM / 2 years ago

LATAM CLOSE-Petrobras raises US$6.75bn in primary market

* Petrobras breaks ground with jumbo bond

* Window opens for Brazilian corporates

* Banco Hipotecario pushes pricing to Wednesday

* Itau economist Goldfajn named Brazil central bank chief

By Mike Gambale and Paul Kilby

NEW YORK, May 17 (IFR) - Below is a recap of primary issuance activity in the LatAm market on Tuesday:

Number of deals priced: 1

Total issuance: US$6.75bn


Petrobras Global Finance B.V., expected ratings B3/B+/BB, announced a US$ benchmark SEC-Reg two-tranche senior unsecured note offering via joint-bookrunners BB SEC/BAML/JPM/SANT. Structure will consist of a 5-year (5/23/21) and 10-year (5/23/26). UOP: Liability Management & General Corporate Purposes. Guarantor: Petroleo Brasileiro S.A. - Petrobras. Settlement date 5/23/16.

Petrobras’s deal is expected to open the door for other Brazilian corporates.

IPTs: 5-year 9.00% area, 10-year 9.25% area

PRICE GUIDANCE: 5-yr 8.75% area, 10-yr 9.125% area

LAUNCH: US$6.75bn 2-part. US$5bn 5yr at 8.625%, US$1.75bn 10yr at 9.0%

PRICED: US$6.75bn 2-part.

- US$5bn 8.375% cpn 5yr (5/23/21). At 99.002, yld 8.625%. Sprd: T+732.5bp. MWC+50bp.

- US$1.75bn 8.75% cpn 10yr (5/23/26). At 98.374, yld 9.0%. Sprd: T+722.6bp. MWC+50bp.


Argentine mortgage bank Banco Hipotecario is expected to price a tap of its 9.75% 2020s on Wednesday after releasing guidance at 8% area (+/- 12.5bp).

The borrower, which has mandated Bank of America and Itau on the deal, is targeting a minimum size of US$100m. Ratings are B3/B- by Moody’s and S&P. Proceeds are going toward working capital, investments in tangible assets and loan originations. There are currently US$200m in outstanding 2020s.

City of Buenos Aires starts roadshows this week to market a new 144A/RegS dollar bond to finance a debt tender.

The borrower was in Switzerland on Tuesday and will head to London and Los Angeles on May 18, New York on May 19 and Boston on May 20. The following week it will return to New York on May 23.

Proceeds will be used to help fund an up to US$390m tender for its 9.95% Series 10 due 2017 notes. The outstanding amount is US$415m. Investors will be paid 105.5. Merrill Lynch, Pierce, Fenner & Smith, Deutsche Bank and HSBC are acting as leads and dealer mangers.

Goldman Sachs is on the road marketing a US$500m financing package for Colombian road project Costera.

The borrower is looking at dollar bonds as well as inflation-linked peso bonds and loans, according to Fitch, which assigned a BBB- rating to the notes.

Peruvian power company Kallpa Generacion has started roadshows to market a US dollar-denominated 144A/RegS bond through Credit Suisse, Credicorp Capital, Morgan Stanley and Scotiabank.

The power generation company, the largest subsidiary of Inkia Energy & IC Power, visited investors in New York on Tuesday and will head to Boston on Wednesday. Proceeds are going toward refinancing debt. Expected ratings are Baa3/BBB- by Moody’s and Fitch. (Reporting by Mike Gambale and Paul Kilby; editing by Shankar Ramakrishnan)

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