Chile's Enap prints long 10-year bond tight to IPT

Chile's Enap prints long 10-year bond tight to IPT

Bonds Debt Capital Markets Chile

Chile's Empresa Nacional del Petroleo (Enap) raised $680m in November 2029 bonds on Tuesday, tightening yield on offer by 10bp throughout the day's trading.

Leads set initial price talk (IPT) at 225bp over US Treasuries during the morning's trading, DCM sources confirmed. At IPT, yield was roughly 25bp to 35bp over where Enap's 2026s were spotted at the time.

Baa3/BBB-/A rated Enap's 2026s were seen at 180bp over Treasuries, sources said.

A banker away from the leads said fair value under present-day market conditions was 25bp to 30bp tight to IPT.

Underwriters reeled in yield at guidance to 215bp over Treasuries before launching a November 2029 transaction at the same level.

Books swelled to roughly $1.3bn, sources added.

The $680m transaction priced with a 5.25% coupon to yield 5.261%, before being re-offered at 99.915, sources confirmed.

Proceeds from the bond sale will refinance $670m in existing debt and also go towards general corporate purposes. The state-owned company has outstanding local currency and Swiss franc-denominated bond debt maturing in December and January.

At the end of June this year, Enap's gross debt to EBITDA increased to 7.1x from 6.8x when compared to the end of 2017. Enap booked $4.72bn in debt at the end of Q2 this year with $810m of that short-term debt, according to Fitch Ratings.

Enap received a $400m capital injection from the Chilean government to cover $251m of the company's short-term debt. Fitch projects that gross debt to EBITDA will remain within 6.5x and 7.1x throughout the rest of 2018.

Bank of America Merrill Lynch, Citi and Scotiabank coordinated the transaction but executives at the investment banks declined to comment.

Enap last tapped the cross-border capital markets in September 2017, placing $600m in 30-year notes.


Image: Enap/ Enel Green Power Cerro Pabellon geothermal plant. ThinkGeoEnergy/ Flickr