Pacific Rubiales reopens dollar market
The Colombian oil and gas firm raised a new bond as markets rallied on Yellen comments
reopened the dollar bond market for Latin American firms
Monday after a week-long hiatus, as US Treasuries rallied on
expectations that Janet Yellen would be confirmed as chairwoman
of the US Federal Reserve.
Yields on the 10-year US Treasury bond fell to 2.68% on
Monday, 12 basis points tighter than this month’s
high, reached on November 12. The lower yields came as
investors reassessed their expectations on the continuation of
quantitative easing, after Yellen spoke in favor of the program
last week. Uncertainty over the length of the
Fed’s $85 billion monthly quantitative easing
program has troubled markets this year.
Pacific Rubiales opened books on a five-year non-call three
transaction on Monday morning, capitalizing on the strong
market tone. The Colombian-Canadian oil and gas exploration and
production firm was last in the market in March,
selling a $1 billion 10 year non-call five bond.
Monday’s deal was set to be the first
dollar-denominated bond sold by a Latin American borrower since
November 8. Brazilian bullet-maker
Companhia Brasileira de Cartuchos (CBC Ammo) was the last Latin
to sell a dollar bond, a $250 million eight-year non-call
Others have looked at the market since, but stayed away.
Last week, Guatemalan sugar producer and exporter
Ingenio Magdalena postponed plans to issue its first
international bond. Rudy Maza, the issuer’s
financial planning and risk manager told LatinFinance
that volatility in US Treasuries was a factor, and said the
firm would look at the market in 2014.
The decision came after Coca-Cola Femsa (KOF) met
fixed-income investors the US earlier this month. The bottler
has not since brought a transaction to market.
Full details of Pacific Rubiales' bond issue can be
LatinFinance's Daily Brief.