24 de septiembre de 2015 / 21:39 / en 2 años

LATAM WRAP-Panama Canal Authority makes debut in tough markets

NEW YORK, Sept 24 (IFR) - The Panama Canal Authority defied poor sentiment on Thursday when it printed a US$450m 20-year debut bond tight to the sovereign despite a particularly rocky day for emerging markets.

The single A rated operator of the Panama Canal cut a solitary figure in the moribund US high-grade primary market where much of the paper was placed.

The credit, rated A2/A-/A, was largely marketed to US municipal analysts and high-grade infrastructure players who understood such structures and saw value in the name.

Emerging markets accounts accustomed to pricing quasi sovereigns with a pick up to government paper thought IPTs of Treasuries plus 230bp was far too tight for their liking.

At that level, the operator of the Panama Canal was offering just 35bp over where a new Panama 20-year would come, according a syndicate official away from the deal.

That compares to the approximate 75bp differential between Mexican state-owned utility CFE and Mexican sovereign paper - one of the tightest sovereign to quasi sovereign spreads in the LatAm space.

Pricing at 98.232 to yield 5.096% or Treasuries plus 220bp, the deal was comped largely against similarly rated US high-grade bonds that were printed this month.

This includes Applied Materials, A3/A-, which printed a 2035 bond at a slightly tighter spread of 210bp, but higher yield of 5.127%.

Its autonomy from government control made the Panama Canal Authority stand out from other quasi sovereigns and helped it obtain a credit standing several notches above Panama, which is rated Baa2/BBB/BBB.

That plus the strategic importance of the waterway to global trade helped leads Bank of America Merrill Lynch lure 100 accounts in a book that neared US$2bn in size.

The paper was largely placed in the US (71%), followed by Europe (18%), LatAm (6%) and Asia (5%). Investors included asset managers, insurance companies, banks, and European pension funds.

Spotting the Panama’s 2036 at a spread of 212.5bp, one banker argued that at 220bp, the issuer came tight to the sovereign curve.

A new sovereign 20-year would have paid a higher 237.5bp spread, given the high new issue premium required to get deals done in EM, he said.


Mexico’s state-owned Bancomext has hired Bank of America Merrill Lynch and HSBC to arrange meetings with fixed-income investors ahead of a potential US dollar-denominated bond sale.

The meetings took place in Boston and Los Angeles today and will move to London and Los Angeles on Friday. A 144A/Reg S transaction may follow.

Mexican white-goods manufacturer Controladora Mabe wrapped up fixed-income investor meetings today through Barclays, Bank of America Merrill Lynch, Citigroup and JP Morgan. Ratings are BB+/BB+.

Aeris Holding Costa Rica, the operator of the Central American country’s main airport, is preparing an approximately US$127m bond sale, according to Moody‘s.

The agency, which assigned a provisional Ba2 rating to the deal, said proceeds would refinance loans extended by shareholders, the Overseas Private Investment Corporation and the IDB.

The Province of Neuquen, the third-largest oil-producing and largest gas-producing province in Argentina, ended roadshows on Monday through Deutsche Bank and JP Morgan.

A USD-denominated 144A/Reg S senior secured capital market transaction secured by gas royalties may follow. Mexican real-estate investment trust Fibra Uno has completed meetings with fixed-income investors through Bank of America, Credit Suisse, HSBC and Santander.

Terrafina, another Mexican REIT, has also finished meeting accounts as it markets a potential US$400m-$500m bond offering

The borrower has mandated Barclays and Citigroup as lead managers, with Itau coming in as co-manager. Expected ratings are Baa3/BBB-. Both REITs could tap the market this week. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)

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