Latin Finance - March/April 2012 - 6

Debt

plus 295 basis points, and the 6.75% 2041s for $1.25 billion at 111.208 to yield 5.935%, or US Treasuries plus 295 basis points. A ﬂood of cross-border bond supply in January and early Overall demand came from Asia, Europe and the Americas February soon laid to rest any doubts about market access with institutional investors, hedge funds, insurance money for Latin American borrowers. Indeed, the period saw record and private wealth management participating. Banco do Brasil volumes for both emerging markets and Latin America, before Securities, Citigroup, Itaú BBA, JPMorgan, Morgan Stanley and the window closed brieﬂy in mid-February as supply fatigue set Santander led the 144a/RegS transaction. in and corporate numbers grew stale. Meanwhile, América Móvil became According to Dealogic, volumes LatAm’s ﬁrst borrower to tap the soDCM Rank by Volume, Year to February 17 out of LatAm hit $26.52 billion from called Dim Sum market in February Citi pulls ahead 35 deals year to February 5, topping when it issued a 1 billion renminbi the $17.44 billion in volume and 27 Rank Bookrunner Value $m # Deals ($160 million) three-year bond. deals seen during the same period in 1 Citi 4,544 17 The ﬁrst quarter also saw a wave 2011. LatAm appears to be leading 2 JPMorgan 4,015 13 of retaps as investors put a premium the way in EM, says one senior banker, 3 HSBC 3,232 12 on liquidity and issuers sought an easy with the region generating nearly $27 way to raise capital while increasing 4 Deutsche Bank 2,816 13 billion over the ﬁrst ﬁve weeks of the the size of existing trades. 5 Morgan Stanley 2,718 5 year, versus a total of $58 billion for For instance, Mexican retailer 6 Itaú BBA 2,631 9 EM overall. Grupo Elektra on January 31 re7 Banco do Brasil 2,284 8 Indeed, in one week alone volumes opened it 7.25% 2018 non-call-four 8 Santander 2,194 10 reached $10 billion as LatAm issuers bonds for another $150 million, rushed to print deals while they could. 9 BofA Merrill Lynch 1,730 8 taking the outstanding size to $550 Activity included large blue-chips, 10 BNP Paribas 1,197 5 million. The ﬁnancial services and a series of retaps, junk names, an specialty retailer reopened the 2018s Total 33,184 50 inaugural Dim Sum and a new kind of at 96.251. Source: Dealogic hybrid perp designed to satisfy Basel Braskem returned for its second III. re-tap this year, when it reopened Fixed-income investors get few DCM Rank by Fees, Year to February 17 its 7.375% perpetual bonds for opportunities to buy into Brazil’s Citi takes top spot another $250 million. The Brazilian telecom sector, so Brasil Telecom’s petrochemical company ﬁnally Rank Bookrunner Revenue $m % Share new 10-year came as a welcome settled on 100.375 to price at a yield 1 Citi 15 13.2 surprise, allowing the company to of 7.345% after building a $1.8 2 JPMorgan 13 12.0 generate an impressive $8.3 billion billion book. This marked its second 3 Itaú BBA 9 8.2 order book, upsize to $1.5 billion and reopening this year after it tapped 4 Deutsche Bank 9 7.6 print with anywhere between a zero to its 5.75% 2021s for $250 million in four basis point concession. The unit 5 HSBC 8 7.2 January, taking the outstanding size of Oi, which is to become the opco for Total 112 100.0 to $1 billion. all Telemar’s operations, priced the Source: Dealogic Banco do Brasil raised $1 billion deal at par to yield 5.75%. through a hybrid Tier-1 non call 11 While BT’s transaction certainly drew a crowd, it was bonds, becoming the ﬁrst Latin America issuer to test drive a new Brazil’s Petrobras that made a true splash in early February. Basel III compliant structure. The BB rated non-cumulative junior The Brazilian oil company shattered its record 2011 $6 billion subordinated perpetual generated a book of $6 billion plus before o ering to price a larger $7 billion sale across four tranches, pricing at par to yield 9.25%. after drumming up more than $25 billion in orders. High-yield credits also tried to take an advantage of the open The book size broke records for a Latin American corporate window, but some were ﬁnally forced to throw in the towel. name, ending some 10-15 basis points tighter than initial Brazilian sugar and ethanol name Grupo Farias, Dominican port guidance across all tranches and printing what was the region’s terminal Caucedo and Argentine utility Edesa were forced to axe largest-ever bond with the exception of PDVSA’s $7.5 billion deals in February. The only exception was the City of Buenos o ering in 2007. Aires, which shelved its ﬁve year bond, only to return a week later In the end, Petrobras printed a $1.25 billion 2015 tranche at and print a $415 million issue after generating a healthy $1.2 99.499 with a 2.875% coupon to yield 3.051%, or US Treasuries billion book. LF plus 275 basis points, and a $1.75 billion 2017 at 99.419 with a 3.50% coupon to yield 3.628%, or US Treasuries plus 290 basis UPDATE > points. The issuer also reopened the 5.375% 2021s for another For daily local and international DCM news, see www.latinﬁnance.com $2.75 billion at 104.181 to yield 4.796%, or US Treasuries

The Floodgates Open

6 LATINFINANCE

March/April 2012

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Latin Finance - March/April 2012

Table of Contents for the Digital Edition of Latin Finance - March/April 2012