4 de junio de 2015 / 20:50 / en 3 años

LatAm borrowers rollout bonds despite softer market

NEW YORK, June 4 (IFR) - Latin American borrowers continued to roll out deals, even as secondary market debt prices struggled to keep up with a rebound in US Treasuries on Thursday.

Yields on the 10-year US Treasury have whipsawed in recent days partly on the back of better-than-expected jobs data, jumping to 2.42% early Thursday, only to end the day at 2.31%.

Against this backdrop, LatAm Airlines moved ahead with the sale of US$500m in 2020s today. The bonds rallied about half a point on the break after leads priced the securities at par to yield 7.25%, exactly in line with IPTs.

Proceeds are going to fund a tender for TAM’s 9.5% 2020s, creating a bid for the transaction from investors switching out of the old debt into the new securities.

Mexican state-owned power company CFE also raised MXN9bn (US$579m) on Thursday through a Euroclearable tap of its 7.35% 2025s, which targeted both foreign and local accounts. The bond was priced at 96.583 to yield 7.83% or Mbonos plus 160bp, also flat to guidance.

Meanwhile, after holding up for most of the week, LatAm sovereign debt was showing signs of strain, with Brazil 2025s dropping about three quarters of a point to hit 97.30-97.70.

This follows the Central Bank’s decision Wednesday to hike the benchmark Selic rate by another 50bp to 13.75%.

Bonds issued by Brazilian oil company Petrobras also suffered some spread widening with its 100-year bonds and 2024s gapping about 5bp to close at around 525bp-523bp and 415bp-405bp, respectively.

Meanwhile the Province of Buenos Aires’s newly minted six-year was quoted at 99.00-99.50 after being priced earlier this week at 98.764.

The borrower is preparing to issue more such bonds on the back of an exchange offer for its 11.75% 2015s. The exchange will expire on June 8. If settlement on the exchange occurs on June 11, holders are expected to receive about US$1,064 of new six-year bonds per US$1,000 of the 2015s.


Lima Metro Line 2 Finance Limited, established by a consortium of Peruvian and European sponsors, has selected banks for a global roadshow ahead of a potential 144A/Reg S USD bond sale of US$1.14bn of senior secured notes.

The issuer met accounts in Boston and London today, and will head to Los Angeles and London on June 5, leaving June 8 free for investor calls. Citigroup, Morgan Stanley and Santander have been mandated as global coordinators for the bond, which is expected to be rated Baa1/BBB/BBB.

Salvadoran bank Banco Agricola, rated Ba2/BB+, has mandated Bank of America Merrill Lynch and Deutsche Bank to take it on the road to market a 144A/Reg S senior unsecured bond.

The borrower will be in Los Angeles and Bogota on Friday, and will head to London, Switzerland and Santiago on June 8, to New York and Miami on June 9 and to Boston and New York on June 10. Banco Agricola is 97.35% owned by Bancolombia, which is rated Baa2/BBB-/BBB.

Brazilian telecoms firm Oi started meeting bond investors today ahead of a possible euro 144a/Reg S bond may follow. The Ba1/BB+BB+ rated firm has mandated BB Securities, BofA Merrill Lynch, HSBC, Santander, Bradesco BBI, Citigroup, Deutsche Bank, BNP Paribas, BTG Pactual and Itau BB to arrange the meetings.

Brazilian aircraft manufacturer Embraer, rated Baa3/BBB, has mandated Citigroup and Morgan Stanley to meet fixed-income investors ahead of a potential SEC registered bond offering. The company finished marketing in New York on Tuesday. (Reporting by Paul Kilby; editing by Shankar Ramakrishnan)

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