LatinFinance - July/August 2016 - 5

NEWS
BONDS

Britain's vote to leave the EU briefly put the cross-border bond market
on hold, but Latin American issuers now find themselves in a rush to get
to market before the summer lull in the US. By Mick Bowen

Beyond Brexit
Latin American issuers took a
break from the cross-border
bond market after British voters
chose to leave the European
Union, but they returned in the
last week of June with a flurry of
deals worth around $1.4 billion.
The Brexit vote sent the
markets into a slump on June 24
and brought a quick halt to new
bond issues. The pause lasted
less than a week, however, and
both sovereign and corporate
issuers found themselves in a
rush to get to market before the
summer lull in the US.
Grupo Aeroportuario
de la Ciudad de México
(GACM), the state-owned
entity that will operate the
new airport in Mexico City, is
holding weekly meetings with
its financial advisors to discuss
an upcoming bond issue. The
airport operator plans to make
a private placement for roughly
$1 billion later this year but
it has not yet picked a date,
sources told LatinFinance.
Citi, HSBC and JPMorgan
- the same banks that are the
global coordinators on a $3
billion revolving credit facility
for GACM - will underwrite the
issue. The cross-border bond,
likely to be a Rule 144A issue,
will also be open to Mexican
pension funds, said a source
involved in the financing plans.
"There will be liquidity and
there will be investor appetite.
It's just a question of the right
time," he said.
JPMorgan, this time with
Citi, Scotiabank and Santander,

is also working with Chilean
power company Transelec
on a private placement worth
up to $700 million. JPMorgan
and Santander are together on
the planned debut of Mexican
real estate developer Grupo
Gicsa in the cross-border
bond market, while Citi and
Deutsche Bank are shopping a
$500 million private placement
for Petrobras Argentina.
Pampa Energía, which
bought a controlling stake in
Petrobras Argentina in May,
could tap the cross-border
bond market in July. The
Argentine energy company has
a $700 million bridge loan from
Deutsche Bank, Citi, ICBC and
Banco Galícia and could call on
the same banks to lead a bond
issue.
After a $16.5 billion,
four-tranche deal in April,
Argentina said it was unlikely
to return to the cross-border
bond market anytime soon.
But the sovereign launched
a surprise issue on June 30,
raising $2.75 billion from the
sale of 12-year and 20-year
notes. The bookrunners Bank
of America-Merrill Lynch,
Credit Suisse, Deutsche Bank
and Morgan Stanley fielded
more than $8 billion in orders
and priced $1 billion in 2028
notes to yield 6.625% and $1.75
billion in 2036 notes to yield
7.125%.
Before Argentina returned to
the cross-border bond market,
the Dominican Republic
tested investor comfort with

DCM rank by volume, year to June 30
Santander extends its lead
Rank
1
2
3
4
5
6
7
8
9
10

Bookrunner
Santander
JPMorgan
HSBC
BofA Merrill Lynch
Citi
BBVA
Deutsche Bank
UBS
Credit Suisse
Banco do Brasil
Total

Value ($m)
12,792
9,948
8,241
7,989
7,201
5,897
4,225
3,538
3,033
2,645

# Deals
26
18
32
24
23
22
10
7
14
11

82,253

142

Source: Dealogic

emerging markets credits and
reopened the 10-year bond it
issued in January this year. The
retap added $500 million to the
bond, bringing the total to $1.5
billion, and carried a yield of
5.6%, a good 128bp inside the
initial issue.
Brazilian food processing
company Marfrig also
reopened a recent issue,
adding $250 million to the $750
million bond it sold in May. The
retap yielded 7.625%, inside
the 8.25% yield on the original
deal.
Colombian toll road
concessionaire Costera
issued a $151 million private
placement and a 327 billion
Colombian pesos ($110 million)
UVR-linked bond to help

pay for the 110km CartagenaBarranquilla highway. Both
tranches have a 17.5-year
maturity and average life of 12.5
years. The dollar-denominated
note carried a 7% yield, while the
peso note had a 6.875% yield.
Costera is owned in part by
local developer Mario Huertas
Cotes and Costa Rican builder
Meco, the same pair that
owns stakes in the Autopista
Conexión Pacífico 3, the first
project to reach financial close
in Colombia's 4G toll road
concessions program. Financing
for Pacífico 3 included a $260
million 19-year cross-border
bond with an 8.5% yield and a
400 billion Colombian pesos
19-year UVR-denominated bond
with a 7.8% yield. LF
July/August 2016 - L ATINFINA NCE.COM 5
http://www.LATINFINANCE.COM
Table of Contents for the Digital Edition of LatinFinance - July/August 2016
