Arauco adds to bond deal on high demand

Arauco adds to bond deal on high demand

Bonds Debt Capital Markets Corporate & Sovereign Strategy Fixed Income Chile US

Chile's Celulosa Arauco has sold $1bn in bonds, more than twice the previously planned amount, as investors filled the order book to more than 3.5 times the offer, LatinFinance has heard.

The bookrunners JPMorgan and Scotiabank sold 10-year notes at a reoffer price of 99.308 to yield 4.336% and 30-year notes at 98.669 to yield 5.592%. The spread on the 2029s came to 180bp over US Treasury notes, down from the initial price talk around 195bp, while it came to 265bp on the 2049s, down from close to 300bp, said a banker working on the deal.

Arauco had planned to sell $400m in new notes to fund the buyback of 2019 and 2021 notes. But strong investor demand, which boosted the price for its outstanding bonds by 10 cents on the day of the trade, convinced the company to increase the size of the sale, one investor said.

Arauco said it had agreed to buy back $96.7m in outstanding bonds, with $33.m in 7.25% 2019s and $64.4m in 5% 2021s. The company had $203m in outstanding 2019s and $200m in outstanding 2021s before the buyback.

The news that moves markets

Read the day's transactions and rumors right in your inbox.

Start free trial