January 10, 2017
South American sovereign sets IPTs in the low- to mid-9% area on a reopening of its 2026 notes
Ecuador is coming to the cross-border bond market for the second time in just over a month, retapping the 9.65% 2026 note it issued in December, sources told LatinFinance.
The sovereign sought last month to capitalize on higher oil prices, following a decision by the Organization of the Petroleum Exporting
Countries (OPEC) to cut production, and raised $750m
from a 2026 note priced to yield 9.65%.
Ecuador has hired Citi again the as sole bookrunner, which set initial price talk in the low- to mid-9% area. Markets opened this morning with the 2026 note yielding around 8.8%, a debt capital markets source said.
The IPTs are "not too horrendous," Anthony Simond, a London-based investment manager at Aberdeen Asset Management told LatinFinance.
A second investor said Ecuador was looking to tap the market ahead of the country's February 19 presidential election and before any further interest rate hikes by the US Federal Reserve.
Petrobras opened the 2017 primary bond market for Latin American issuers on Monday, issuing $4bn in a two-tranche debt sale.