17 de junio de 2015 / 20:44 / en 2 años

Post-Fed bounce in debt prices raises issuance hopes

NEW YORK, June 17 (IFR) - A positive reaction to the Fed’s statement is set to inject life into LatAm primary markets with utility AES Panama expected to be the first off the blocks after ending roadshows on Wednesday.

The yield on the 10-year US Treasury settled back down to around 2.30% after hitting close to 2.50% last week in response to the Fed statement.

Traders were reporting good two-way flow, with recently minted LatAm deals putting in varying performances.

“People still expect a rate hike this year, but the Fed statement was perceived as a dovish statement and that helps emerging markets,” said a syndicate manager.

Salvadoran bank Banco Agricola’s new 2020 enjoyed positive price action, hitting 101.85-102.15 today after pricing last week at par.

Some traders are seeing more upside for the credit given that secondary yields are still at 6.25% versus 4.60% on a subordinated 2020 issued by its owner Bancolombia.

“Some people prefer not to be involved in El Salvador, but if you look at Agricola’s relationship with Bancolombia, there is still room to tighten,” said Klaus Spielkamp, head of fixed-income sales at Bulltick.

Mexican state-owned utility CFE’s new 30-year lost some gains to trade at 100.25-100.75, but is still above reoffer of 99.146.

Among the laggards was Argentina, where debt prices fell this morning following presidential candidate Daniel Scioli’s decision to appoint Carlos Zannini - a close confidant of incumbent President Cristina Kirchner - as his running mate.

The Bonar 2024s had slipped about two points by the afternoon to trade at 96.25-96.75.

Such price action may be overblown, say some strategists who think, if elected, Scioli will be less influenced by Kirchner than some think.

“The president is his own person and I still think Scioli will be a moderate president who will cure the default,” said a strategist.

Others are banking on a win for market favorite Mauricio Macri given his stronger than expected showing in the polls.

PIPELINE

Mexican hospitality company Grupo Posadas is poised to kick off roadshows this week through Citigroup, Bank of America Merrill Lynch and JP Morgan ahead of a possible USD 144A/RegS bond sale.

The company, rated B2/B/B+ by Moody‘s/S&P/Fitch, will start investor meetings in Los Angeles on Friday. Next week, it will see accounts in London on June 22, in Boston on June 23 and in New York on June 24.

The Government of Aruba, rated BBB+ by S&P and BBB- by Fitch (both stable), has mandated Credit Suisse and Raiffeisen Schweiz to lead a roadshow in Switzerland this week.

The Caribbean island is a part of the Kingdom of the Netherlands. The deal is “supervised” by the Netherlands but does not have an explicit guarantee.

Jamaica has started investor meetings Citigroup. The country, rated Caa2/B/B-, will see accounts in New York (on June 18, Boston (19), London (22), Germany (23) and wind up 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+, ended roadshow today on the West Coast and Boston and could come to market as soon as Thursday through Deutsche Bank and Banco General.

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; editing by Shankar Ramakrishnan)

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