High-yield bond issuance set to continue
After successful trades out of Guatemala and Peru, more double-B borrowers were preparing to follow in the first week of November
With the US monetary stimulus seen remaining in place until
at least December, a steady supply of LatAm issuers have tapped the bond market.
The issuance has been highlighted recently by a few well-bid high-yield
transactions. More are scheduled for the coming week.
Chile’s Latam Airlines is expected to price a $450
million 2020 bond backed by ticket and cargo payments as soon as Monday.
Peru’s Andino Investment Holding is expecting to offer 2020 bonds following a
roadshow. The trade-focused holdco expects
to raise $130 million.
In Mexico, Cobre de Mayo is hoping to sell investors on the
turnaround story of its mining operation, its Chairman recently
told LatinFinance. A $200 million deal is likely. Investment-grade Mexican
miner Fresnillo could
arrive in the following week.
The trades would follow a heavily subscribed deal from Peru’s
San Miguel Industrias (SMI). The plastics maker specializing in the beverage
$200 million after getting $2.3 billion demand.
SMI followed Guatemala’s Cementos Progreso, who saw similar
interest in a 10-year
transaction that was upsized to $350 million. Split-rated Banco Nacional de
Costa Rica picked a good moment for its international debut, which priced
well versus benchmarks.
High-yield transactions from LatAm totaled $20.5 billion
from 55 deals through Friday, according to Dealogic data, including $7.5
billion since August 1. This is up to $15.8 billion from 43 in the corresponding
January-October period in 2012.
Overall, LatAm issuers had sold $141.8 billion
in cross-border and domestic bonds as of Friday, through 374 transactions,
according to Dealogic data. This is ahead of 2012’s pace of $137.7 billion in
345 deals in the corresponding period. Citi sits at the top of the league
tables, with $16.6 billion volume, followed by HSBC and Bank of America Merrill