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By Paul Kilby
NEW YORK, April 27 (IFR) - After a robust start, LatAm credits gave back some gains later in the day Monday as investors took profits in Brazilian names following a nice rally over the past week.
Petrobras - whose release of full-year results sparked the rally - saw its bonds run 8bp-14bp wider on Monday, with the 2024s and 2044s at 415bp-405bp and 455bp-445bp.
Bonds backed by drillships on charter to Petrobras also lost ground, with Odebrecht’s 6.75% 2022s closing at around 86.25-87.25. The sovereign’s 2025s also slid back to 100.75 after hitting a recent mid-market peak of 101.20 on Friday.
“There was a lot of profit-taking in Brazil,” said a New York-based trader. “We are back (in some cases) to October levels before the Petrobras scandal, and so we are seeing people take chips off the table after the big run-off in Brazil.”
Even so, most recently minted new issues were holding up relatively well, with YPF’s new 10-year being quoted at 101.50-102.00 after pricing last week at 99.097.
Meanwhile miner Southern Copper’s new 2025s and 2045s were spotted at 100.00-100.50 and 99.50-100.25 versus re-offer prices of 99.459 and 99.833, respectively.
The primary pipeline continues to grow, including an up to US$500m 10-year debut bond from JB y Compania, whose flagship brand Jose Cuervo tequila has strong name recognition and should attract investors seeking diversity in Mexican corporates.
“I’d be looking at Mexican beverage companies (as comps),” said a banker away from the deal. “(But) I am not sure they would have to pay much more, as people love these names.”
Proceeds will refinance existing indebtedness, leaving the bond as the group’s only debt, said Fitch.
This follows a US$404m debt-funded acquisition of Bushmills, with gross and net leverage expected to decline to around 1.5x and 0.8x over the next 18 to 24 months as the two companies are consolidated, the agency said.
ACI Airport Sudamerica, the controlling shareholder of the concessionaire of Uruguay’s Carrasco airport, is out with price guidance of 7.25% area on a US$200m 2032 senior secured bond ahead of expected pricing tomorrow.
The bond, which has an average life of 12 years, is backed by shares in Cerealsur and Puerta del Sur (PdS), which are acting as guarantors after the repayment of existing PdS notes is made. Covenants include limitations on additional debt, dividends, sale of assets, liens, sales and leaseback, M&A and the transfer of assets.
The listing will be in Luxembourg and the bonds will be governed by New York law. Expected ratings on the 144A/Reg S bond are BB+/BB+ by S&P and Fitch. Joint bookrunners are Bank of America Merrill Lynch and Nomura.
Banco de los Trabajadores (Bantrab) is out with initial price thoughts of 10.50% area on a new US$100m 10-year Tier 2 subordinated bond ahead of expected pricing on Tuesday or Wednesday.
The Guatemalan bank, which focuses on payroll-lending to public sector employees, wrapped up roadshows last week through Deutsche Bank. The bank has corporate ratings of Ba3/BB-, while the bond is expected to be rated B2/B+.
JB y Compania SA de CV (Jose Cuervo) will start fixed-income investor meetings this week through Bank of America Merrill Lynch and Citigroup as it seeks to market a possible senior unsecured USD bond.
The borrower will be in London on Wednesday, in Boston on Thursday and in Los Angeles on Friday. The following week, it will head to Chicago on May 4 and New York at May 5. The company, rated BBB/BBB by S&P and Fitch, is a global spirits company and the largest tequila producer in the world.
Banco Latinoamericano de Comercio Exterior (Bladex), a Panama-based trade bank, was to kick off fixed-income investor meetings in London and Los Angeles today through BAML and Citigroup.
The borrower, rated Baa2/BBB/BBB+, will head to Switzerland and Boston on April 28 and New York and Philadelphia on April 29.
Pacific Rubiales, the largest private oil producer in Colombia, has kicked off investor meetings through Bank of America Merrill Lynch, Citigroup and HSBC. The company heads to Santiago on April 30, Los Angeles on May 4 and Miami on May 6. (Reporting by Paul Kilby; Editing by Marc Carnegie)