25 de septiembre de 2015 / 20:54 / en 2 años

LATAM WRAP-Argentina's Neuquen struggles to complete bond sale

NEW YORK, Sept 25 (IFR) - Argentina’s Province of Neuquen struggled to complete its bond sale on Friday after a roller coaster week for Latin American assets.

Leads are telling accounts that the 12-year bond backed by gas royalties was being postponed due to market conditions, though there is no formal announcement, said one investor.

“It is not the best time to bring a deal,” said the investor. “I was surprised they were moving ahead but I guess they thought they could get it done.”

Leads Deutsche Bank and JP Morgan had already sidelined the deal for most of this week after ending roadshows on September 21 as the gloom over Brazil’s economic crisis soured sentiment across EM.

The deal’s longer-term maturity would have helped the province extend the average life on its debt to 7.5 years from 3.6 years, according to Fitch, which had assigned a Triple C rating to the up to US$350m issue.

A better tone this morning following the Brazilian central bank’s pledge late Thursday to defend the Real with all available weapons provided a better backdrop for issuance.

But the window for execution proved fleeting as markets gave back earlier gains and left the province struggling to attract buyers at initial price thoughts of 10.25% area.

A sell-off in Argentine debt prices after the government ordered mutual funds to adjust the way they value dollar bond portfolios further complicated execution for the deal.

“The 10.25% yield is decent but with government created volatility I would demand more,” said Jorge Piedrahita, CEO of broker Torino Capital.

“Otherwise I would rather buy the Province of Buenos Aires’ 2021s which yield 11.30%.”

Meanwhile, Petrobras 2024s were closing at around 69.75-70.75, off the earlier high of 71.00-72.00.

Traders are bracing for forced selling among index players that can no longer hold the junk rated Petrobras as month end approaches.

“Just because the central bank has intervened doesn’t mean anything has changed,” said a New York based trader.

Dealers are now starting to quote Brazil CDS protection in points upfront rather than on a spread basis, a practice that typically applies to distressed credits.


Mexico’s state-owned Bancomext wrapped up roadshows today through Bank of America Merrill Lynch and HSBC to arrange meetings with fixed-income investors ahead of a potential US dollar-denominated bond sale. A 144A/Reg S transaction may follow.

Mexican white-goods manufacturer Controladora Mabe has finished fixed-income investor meetings 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.

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-. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)

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