7 de mayo de 2015 / 14:58 / hace 3 años

Votorantim breaks lull in Brazilian issuance

NEW YORK, May 7 (IFR) - Votorantim Cimentos printed a EUR500m seven-year bond on Thursday, defying an ongoing rout in global rates to become the first Brazilian issuer this year to sell international bonds.

Still, the Brazilian cement company barely budged on pricing in what has been a tough environment in Europe, launching at 310bp over the interpolated mid-swaps curve or flat to earlier guidance.

This comes after German bond yields Thursday suffered their largest weekly rise since mid-1999.

“It is bad luck in terms of timing,” said a senior banker. “Any Brazilian issuer that has been looking at euros may be thinking twice now. It may be hard to make an argument that there is a clear benefit to doing euros over dollars.”

In the end, the bond, rated Baa3/BBB/BBB, was priced at 98.542 with a 3.5% coupon to yield 3.737%.

That said, the deal is significant mostly because it marks the first Brazilian issuer to venture into the international capital markets this year and it could encourage others to follow suit in a dollar market that has proven resistant to the recent sell-off in US Treasuries.

“Even with the Treasury sell-off over the past few weeks, our space hasn’t got hit,” said a syndicate official. “Our market is in good shape.”

Meanwhile, news that Chilean President Michelle Bachelet is reshuffling her cabinet in an effort to address her sinking popularity has thrown into question the timing of a long-expected bond sale from the sovereign, bankers said.

A deal had been expected to take place as soon as this week after the Andean nation filed with the SEC Wednesday to issue up to US$1.26bn in bonds.

Bachelet has requested the resignation of all her ministers and will decide who will stay over the next 72 hours. The sovereign is expected to hold back on any bond issue until it is clear who will run the finance ministry.

“If there is a change at the Finance Ministry, the guys pulling the strings on the deal will have to wait until they have a new boss,” said the senior banker.

Still, the news has done little to move the bonds, with the existing 2025s trading to around 103.25 or a G-spread of 52bp. “They are down a couple of points since late April, but that is because of US Treasuries,” the banker said.

Elsewhere in the sovereign space, Argentine debt prices were opening flat despite reports in local newspaper Cronista that the government was considering another bond issue to bolster reserves following its successful US$1.416bn sale of Bonar 2024s in late April. Those bonds were being quoted at 99.50-100.00 earlier today.

In the corporate space, Tequila maker Jose Cuervo’s new 10-year bond was starting the day some 3bp tighter at 162bp over US Treasuries after pricing Wednesday at 99.005 to yield 3.871% or 165bp over. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)

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