11 de junio de 2015 / 21:16 / en 2 años

Banco Agricola, Oi push week's new-issue tally close to US$4bn

NEW YORK, June 11 (IFR) - Salvadoran bank Banco Agricola and Brazilian telco Oi together issued the equivalent of US$1bn on Thursday, bringing this week’s supply tally to US$3.8bn.

A five-year from Banco Agricola, rated Ba2/BB+, quickly caught investor attention after leads dangled mid 7% area price thoughts, only to squeeze the yield by an eye-catching 75bp after books swelled to US$1.5bn.

In the end, the bond priced at par to yield 6.75%, the tight end of final 7% area guidance.

Price discovery proved tricky given the bank’s zip code, debut status and the implicit support of its owner Bancolombia, which is rated higher at Baa2/BBB-/BBB-.

Accounts were mostly seeking a pick-up over the sovereign curve, where the 2019s were trading at a yield of around 5%, but differed on the extent of that spread.

At final pricing of 6.75%, the deal came close to the 150bp premium that Guatemala’s Banco Industrial’s 2021s (BB/BB) offer over its sovereign.

Others had been looking at Paraguay’s Banco Regional, which also enjoys strong ownership through Rabobank, but its bonds trade some 250bp wide to the sovereign.

Across the Atlantic, book size on Brazilian telco Oi’s EUR600m six-year bond reached a modest EUR1bn.

The deal, which was used to finance a tender for up to EUR2bn in outstanding bonds, marked an unusual foray by a Latin American sub-investment grade name.

Pricing for the Ba2/BB+/BB+ arguably reflected its junk status, coming at 99.38 with a 5.625% coupon to yield 5.75% or mid-swaps plus 504.7bp.

That is wider than the low 4% area being quoted on the euro-denominated 2021s issued by Mexican cement company Cemex, which is rated a lower B+ and the only other LatAm high-yield name that has tapped the euro market in recent years.

This came on a day when US dollar markets found some relief in a US Treasury rally that saw the 10-year yield tighten back to 2.38% after hitting a seven-month high of 2.5%.

But investors still remain jittery about US rate volatility, outflows and the impact on EM from potential Fed tightening later this year.

“We are starting to see some short covering, but we are not seeing a lot of new capital being committed,” said a New York based trader.


Jamaica is readying investor meetings in Europe and the US through Citigroup, according to an investor.

The Caribbean nation, rated Caa2/B/B-, will see accounts in Los Angeles on June 16, in New York on June 18, in Boston in June 19, in London on June 22, in Germany on June 23 and in Amsterdam on June 24.

Meetings are being described as a non-deal roadshow, but markets have been expecting the sovereign to raise funding to retire a PetroCaribe loan owed to Venezuela.

Utility AES Panama, rated BB-/BB+, will hit the road next week through Deutsche Bank and Banco General to market a possible 144A/RegS senior unsecured bond.

The company will visit accounts in Santiago and London on June 15, in New York and the West Coast on June 16 and the West Coast and Boston on June 17. Proceeds are expected to finance a tender for US$300m in outstanding 6.35% 2016s.

AES Panama is the country’s largest electricity generation company. Panama (Baa2/BBB/BBB) owns 50.4% of the company, while AES Corporation (Ba3/BB-/BB-) holds a 49% stake. (Reporting By Paul Kilby)

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