Uruguay ends cross-border break
January 16, 2019 |
Sovereign issuer sells $850m in new notes after receiving more than $6bn in orders
Uruguay has sold $850m in bonds, ending a six-week break in the cross border market for Latin American issuers.
Itaú BBA, JPMorgan and Scotiabank priced the 12-year notes at 175bp over US Treasury bonds, after the bookrunners had put the initial price thoughts at 200bp and then tightened the spread on strong demand, said a source involved in the deal.
"The book was very good quality and attracted a 'who's who' of the emerging markets and high-yield investment space," the source said.
Uruguay received more than $6.2bn in orders for the new notes. It also paid a new issue premium of up to 5bp over its 2027 bonds, the source said, putting the yield at around 4.5%.
"Uruguay has a really good ratings profile in Latin America and is overperforming most of its peers, including Mexico and Colombia," the source said. "It is trading tight to peers, despite having lower yields."
Uruguay will use the money from the new bonds to buy back up to $400m in outstanding notes that mature in 2022, 2024 and 2027. The country has offered premiums of $134 for the 8% 2022 notes, $32.25 for the 4.5% 2024s and $22.75 for the 4.375% 2027s.
Uruguay has given bondholders until January 22 to tender their notes, although it has not said how it will repurchase in each series. The country has $551m in outstanding 2022 notes, $1.29bn in 2024s and $2.1bn in 2027s.