Argentina bond sale spurs LatAm deal flow
April 29, 2016 |
Four new deals were agreed in Latin America plus a eurobond from the IIC gave the region's DCM numbers a lift
Latin American debt capital market bankers enjoyed
an uptick in new issues this week, on the back of positive investor sentiment generated
by Argentina’s $16.5bn bond deal.
Bankers priced $2.75bn in new issues after the Argentine
deal, while the Inter-American
Investment Corporation completed a $500m Reg S eurobond last month.
Nacional de Costa Rica sold a 5.78% $500m 2021 green bond. Mexican food
Alimentos sold a $1bn 2026 bond, while Colombia’s Gruposura
Finance upsized a $550m 2026 bond and Guatemala
rounded out a flurry of deals last week with a $700m 10-year deal, its first
since February 2013.
Sura and Sigma unlocked some momentum for Latin
American corporate cross-border bond issuers. The order book for Sura’s issue
swelled to almost $3bn, sources said, while Sigma accumulated up to $3.5bn in orders.
Investor demand for emerging market credits is increasing, one investor said.
Improved investor sentiment led Mexican cement maker Cemex
to launch a tender offer last week to buy back three bonds. Cemex is aiming to
buy back its 2018 floating rate notes, its 6.5% 2019s and up to $150m of its
Sura’s $550m 2026 bond was the first Colombian corporate
issuer to tap the cross-border markets. Bookrunners Bank of America-Merrill
Lynch and JPMorgan deemed investor appetite enough to increase the deal by $10m.
Guatemalan trade was perceived as "fantastic" by one investor, who thought
other emerging market sovereign issuers should look to this bond as a yardstick for future issues.
Guatemala obtained yield of 4.6%, at a time when spreads on emerging market credits have come in a lot in the last two weeks. Sovereigns with large
funding needs may be well served in tapping markets during this window, the investor said.
corporate issuers set to tap the bond markets in May include AES
Dominicana and Banco de Bogota.
Argentine provinces are set to tap the cross-border bond market in the next
two weeks. Neuquen province has mandated Deutsche
Bank and JPMorgan to conduct investor meetings next week for a new bond sale
and debt exchange offer on its 2021 notes.
province of Chubut is also preparing to issue an $83m cross-border bond due in 2023, according
to Moody's. The agency has given the bond a B3 rating.