Latin Finance - November/December 2011 - 6

Debt

Pockets of Opportunity

Meanwhile, Mexican telecom giant America Movil (AMX) continued its strategy of diversifying it funding base, with taps in euros, sterling, Japanese yen, Swiss francs and US dollars, all in The expected $5-7 billion post-summer issuance ﬂood turned a matter of months. out to be a trickle of quasi-sovereign and blue-chip names as The move sparked speculation that others would soon follow, the uncertainty caused by the euro-zone’s debt woes kept both including Brazilian oil giant Petrobras, which was heard to be in investors and borrowers sidelined during the autumn months. discussions about its own debut in Europe. This comes after what had been the slowest September since The A2/A/A wireless operator priced €1 billion ($1.39 the global ﬁnancial crisis in 2008, while October was not much billion) in 2019s at 99.049, with a 4.125% coupon, to yield better, with just ﬁve cross-border deals in the investment-grade 4.268%, or mid-swaps plus 180 basis points. It also printed a category. £500 million ($800 million) 2026s at Thanks to low US Treasury yields, DCM Rank by Volume, Year to October 28 99.280, with a 5% coupon, to yield pricing remained attractive, but 5.007%, or gilts plus 217 basis points, HSBC takes lead borrowers continued to resist higher inside guidance of 220-225 basis Rank Bookrunner Value $m # Deals new issue premiums. points. 1 HSBC 10,429 77 Meanwhile, high-yield names were AMX also raised in late October 2 JPMorgan 9,264 34 still underwater in October, with the ¥12 billion ($156 million) through a exception of Venezuela, which was 3 Santander 9,167 53 dual-tranche issue, marking its debut able to raise $3 billion by selling new Samurai and becoming the ﬁrst Latin 4 BofA Merrill Lynch 8,930 40 11.75% 2026s at 95.00 to a captive American corporate to tap this market 5 Citi 8,147 45 local investor-base. without a JBIC guarantee. Mitsubishi, 6 Deutsche Bank 8,113 32 In mid-October, Mexican stateUFJ-Morgan Stanley and Mizuho were 7 Itaú 5,565 39 owned oil company Pemex broke the leads. 8 Credit Suisse 4,110 16 silence in DCM with the region’s ﬁrst A three-year ¥6.9 billion tranche 9 Banco Bradesco 3,816 37 cross-border sale in over a month. was sold at par to yield 1.23% at yen 10 Banco do Brasil 3,440 26 The opportunistic retap of its 6.5% Libor plus 80 basis points, while a 2041 allowed it to raise $1.25 billion Subtotal 70,980 216 ﬁve-year ¥5.1 billion bond was priced and was supported by some $300 at par to yield 1.53% or yen Libor plus Total 99,139 260 million in reverse-enquiry demand. 100 basis points. Source: Dealogic The borrower upsized from its original Both priced in line with earlier benchmark level and priced at the guidance of yen Libor plus 70-90 DCM Rank by Fees, Year to October 28 tight end of the 320 basis point area basis points for the three-year and plus JPMorgan moves to top spot guidance, to yield 6.339%. 90-110 basis points on the ﬁve-year. BNP Paribas and Deutsche Bank The Samurai followed AMX’s $2 billion Rank Bookrunner Revenue $m % Share managed the Baa1/BBB deal. ﬁve-year bond and $750 million retap 1 JPMorgan 40 12.7 Brazil’s Eletrobras followed, but of its 2040s, in which it locked in the 2 BofA Merrill Lynch 31 9.9 downsized a planned $2.5 billion second-lowest coupon ever achieved by 3 HSBC 30 9.6 10-year bond to $1.75 billion, in a a telecommunications company. 4 Itaú 24 7.5 tradeo for pricing over size. The Finally, AMX issued a 270 million 5 Citi 22 6.9 quasi-sovereign was heard o ering a Swiss franc 2016 bond in August that Subtotal 224 71 40-50 basis point new issue premium. came with a reo er price of 99.775 to Total 315 100 The 2021 priced at par, with a yield 2.039%, or mid swaps plus 86 5.75% coupon in line with guidance Source: Dealogic basis points. after demand reached close to $5 Telemar’s Brasil Telecom (BT) billion. Credit Suisse and Santander led. priced a 1.1 billion real ($662 million) ﬁve-year global bond In late October, Chile’s Codelco tested investors’ tolerance for in early September, marking the last of these trades before FX ultra-low premiums, and won, taking advantage of a relief rally volatility closed the door. The telecom saw some pushback below on progress to solve the euro-zone debt crisis. the 10% whispers, but still squeezed guidance before pricing at The quasi-sovereign priced $1.15 billion in new 2021s at 99.516 with a coupon of 9.75% to yield 9.875%. 98.573 with a 3.875% coupon to yield 4.05%, or US Treasuries Chile printed a $1.35 billion equivalent retap of its global plus 167 basis points. 2020s denominated in pesos and new US dollar 10-year that Some banks saw the company paying just a zero-to-two came at record low yields. LF basis point concession, while others had it as wide as 15-17 UPDATE > basis points. Either way, it halved what other borrowers had been o ering and may encourage others to follow. HSBC and For daily local and international DCM news, see www.latinﬁnance.com Mitsubishi-UFJ led the A1/A/A+ rated bond transaction.

6 LATINFINANCE

November/December 2011

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Latin Finance - November/December 2011

Table of Contents for the Digital Edition of Latin Finance - November/December 2011