Chile's CMPC meets Swiss investors

Chile's CMPC meets Swiss investors

Capital Markets Bonds Chile

Chilean pulp and paper company Empresas CMPC met with investors in Europe under the guise of a non-deal roadshow, according to three sources familiar with the plans.

CMPC conducted meetings with the buyside in Switzerland late last month but made clear that no imminent transaction would follow, two of the sources told LatinFinance.

"The rates in Switzerland are quite cheap compared to dollars right now and the swap is highly favorable," one investor said.

CMPC had tested the dollar bond market earlier this year, but after completing investor meetings in May, the company did not follow-up with a new transaction.

"The only thing in Switzerland is that it can be hard to gain size," the source added. "I think [CMPC] wanted about $500m when it did a dollar roadshow, but in Swiss francs it is difficult to go beyond CHF300m [$302.5m] or CHF400m."

CMPC has a $500m 6.125% bond maturing in November next year as well as $500m in 4.5% paper maturing in 2022, according to the company's investor relations website.

"Interest rates are low [in Switzerland] and Chilean credits like the Swiss market because the issuance sizes are toward the conservative side, so why not," a syndicate banker said. "Swiss investors also like higher-rated names and CMPC ticks that box."

Baa3/BBB-/BBB rated CMPC opted for a local currency bond sale in July, printing UF8m ($354m) in inflation-indexed paper. The company said proceeds would pay down outstanding bond debt.

Santander Chile was the last credit from the Andean country to tap Swiss bond buyers, printing CHF115m in long five-year paper last month.


Photo: CMPC paper mill in Laja, Chile. Provided by Periodico Resumen/ Flickr