Latin Finance - September/October 2009 - 6

Debt Endless Summer “I think we came at the right price,” EPM CFO Oscar Herrera says. “The market has been very good.” Despite extraordinary demand, he says EPM could not have upsized without additional Borrowers jumped on unseasonably robust appetite from government approval. JPMorgan and Bank of America-Merrill international investors to unleash a glut of supply unmatched in Lynch managed the sale, which will help fund the utility’s ambitious recent memory, and much more is in the pipeline. The buyside growth plans, including international expansion. Other big-book hurled $37.0 billion in orders at the $6.5 billion in July crossborder LatAm sales, a vast leap versus the $470 million dribble of high grade 10-year bonds included a $1 billion bond from Brazil’s Eletrobras yielding 7% (six times subscribed), a $500 million o er last July, typically a quiet month. from Chile’s Arauco at 7.406% yield (five times), and $850 million “I would anticipate in September through December a pretty from Trinidad’s Petrotrin to yield 9.875% (six times). CSN, Cemig, heavy new issuance calendar,” says Arif Joshi, who manages $4 CPFL, ISA, and Banco do Brazil are billion in EM debt at Halbis in New DCM Rank by Volume, Year to August 18 among the many eying September sales York. “Those corporates that price at if the market holds up. Brazil opened up JPMorgan and Citi overtake HSBC a significant discount to the curve will the long end of the curve, for stronger be successful in issuing that paper,” Rank Bookrunner Value $m # deals corporates and opportunistic sovereigns he adds. He explains that more than 1 JPMorgan 5,256.54 15 to follow. Brazil reopened its 2037 bond 90% of the new EM issues since the for $500 million, on almost $7 billion in 2 Citi 3,893.88 29 beginning of the year have traded up. orders, through JPMorgan and Deutsche 3 HSBC 3,856.76 21 From June 1 to August 15, Latin Bank. issuers placed 28 transactions totaling 4 BBVA 2,832.17 30 $11.60 billion, according to Dealogic, 5 Credit Suisse 2,688.78 8 compared to 15 for $2.07 billion in 6 Santander 2,471.94 21 Newfound investor comfort also the same period of 2008. EM volume 7 Barclays Capital 1,884.90 4 eventually trickled down the ratings scale, reached $51.01 billion, compared to 8 BofA-Merrill 1,872.14 10 with five-year o ers the issue of choice, $35.33 billion in the corresponding 9 Goldman Sachs 1,498.77 3 also at nice yields. A unit of Brazil’s Cosan period of last year. 10 Bradesco 1,372.54 6 sold $350 million in 2014 bonds to yield For higher-rated issuers, the rules Subtotal 27,628.42 106 9.625%, after building a $1.5 billion order are fairly simple. Announce a 10-year book. The deal through Morgan Stanley, Total 41,115.45 221 benchmark-sized bond, o er investors Santander and Bradesco, was tightened Source: Dealogic a juicy yield, watch the order book inside 9.75%-10.00% price guidance, as explode several times the o er – upsize well as upsized from $300 million. if able or needed – and stand back as Mexico’s Javer priced a $180 million DCM Rank by Fees, Year to August 18 the bonds pop up a few points in the 2014 to yield 13%, the highest from a JPMorgan rakes in bond fees aftermarket. As investor confidence LatAm issuer in recent memory. The continues to improve, more pure Rank Bookrunner Revenue $m % Share transaction through Credit Suisse and corporate issuance – including sub1 JPMorgan 34.13 19.79 Bank of America-Merrill Lynch generated investment grade is expected. 2 Citi 14.92 8.65 $250 million in orders. The bond traded Colombian state-controlled oil 3 BofA-Merrill 10.62 6.16 down on issue, and was heard o 0.5-1.0 producer Ecopetrol’s 2019 o er drew points in mid-August. 4 Barclays Capital 10.26 5.95 one of the largest books of the year, Compatriot Alestra priced $200 5 HSBC 10.13 5.87 at nearly $9 billion in orders. It sold million in 2014 bonds to yield 11.75%, $1.5 billion, priced at 99.642 to yield 6 Credit Suisse 9.89 5.74 in an o er three times subscribed. Citi 7.677%, or US treasuries plus 410 basis 7 BBVA 8.65 5.02 and Morgan Stanley led. Fellow Alfa unit points. The 102 basis point spread to 8 Santander 8.22 4.77 Petrotemex rounded out the season with the sovereign at the time implied only 9 Bancolombia 6.37 3.70 a $200 million five-year through Bank of a slight di erence to the 90-100 basis 10 Correval 4.47 2.59 America-Merrill Lynch and JPMorgan. points that Pemex’s and Petrobras’ Subtotal 117.68 68.25 The 9.75% yield turned out to be closer 2019s traded o of their sovereigns, Total 172.43 100.00 to fair value than other issues, as bonds investors say. Barclays and JPMorgan Source: Dealogic traded flat on reo er. managed the sale. The bond traded up Elsewhere, Cemex finally wrapped 2.0-2.5 points in the aftermarket, and up a $15 billion bank debt renegotiation with 75 banks, giving it was heard at 104-105 mid-August. valuable breathing room but keeping it to a very tight repayment EPM followed with a $500 million 2019 o er that drew $6.5 billion in orders. The municipally-owned Colombian utility priced schedule. A new facility due 2014 houses its 2009-2011 maturities and pays Libor plus 450 basis points. It also privately placed $895 at 98.292 to yield 7.875%, or treasuries plus 432.5 basis points, million of that total debt package with a group of lenders at a fixed putting it about 140-145 basis points wide of the sovereign, rate of 8.91%. A series of potential step-ups incentivize the Mexican according to investors. The bond traded up and was at 104-105 cement maker to keep on schedule. LF mid-August. High Yield, Finally 6 LATINFINANCE September/October 2009

Latin Finance - September/October 2009

Table of Contents for the Digital Edition of Latin Finance - September/October 2009

Latin Finance - September/October 2009
Contents
Investment Banking Survey
Who Said That?
OTPP Investment Strategy
Central Bank Scorecards
Brazil Liability Management
Real Estate Equity Resurrected
Structured Finance Forecasts
Grim Outlook. Reform Required
Banorte Seeks to Grow
Peru Spending Hits a Block
BCP Sees Better Days
Caribbean Investment Report
Sustainable Banking
Legal Services Survey
Parting Shot
Latin Finance - September/October 2009 - Latin Finance - September/October 2009
Latin Finance - September/October 2009 - Cover2
Latin Finance - September/October 2009 - Contents
Latin Finance - September/October 2009 - 2
Latin Finance - September/October 2009 - 3
Latin Finance - September/October 2009 - 4
Latin Finance - September/October 2009 - 5
Latin Finance - September/October 2009 - 6
Latin Finance - September/October 2009 - 7
Latin Finance - September/October 2009 - 8
Latin Finance - September/October 2009 - 9
Latin Finance - September/October 2009 - 10
Latin Finance - September/October 2009 - 11
Latin Finance - September/October 2009 - 12
Latin Finance - September/October 2009 - 13
Latin Finance - September/October 2009 - Investment Banking Survey
Latin Finance - September/October 2009 - Who Said That?
Latin Finance - September/October 2009 - 16
Latin Finance - September/October 2009 - 17
Latin Finance - September/October 2009 - 18
Latin Finance - September/October 2009 - 19
Latin Finance - September/October 2009 - 20
Latin Finance - September/October 2009 - 21
Latin Finance - September/October 2009 - 22
Latin Finance - September/October 2009 - OTPP Investment Strategy
Latin Finance - September/October 2009 - 24
Latin Finance - September/October 2009 - 25
Latin Finance - September/October 2009 - Central Bank Scorecards
Latin Finance - September/October 2009 - 27
Latin Finance - September/October 2009 - 28
Latin Finance - September/October 2009 - Brazil Liability Management
Latin Finance - September/October 2009 - Real Estate Equity Resurrected
Latin Finance - September/October 2009 - 31
Latin Finance - September/October 2009 - 32
Latin Finance - September/October 2009 - 33
Latin Finance - September/October 2009 - 34
Latin Finance - September/October 2009 - 35
Latin Finance - September/October 2009 - 36
Latin Finance - September/October 2009 - Structured Finance Forecasts
Latin Finance - September/October 2009 - 38
Latin Finance - September/October 2009 - Grim Outlook. Reform Required
Latin Finance - September/October 2009 - 40
Latin Finance - September/October 2009 - 41
Latin Finance - September/October 2009 - 42
Latin Finance - September/October 2009 - 43
Latin Finance - September/October 2009 - 44
Latin Finance - September/October 2009 - Banorte Seeks to Grow
Latin Finance - September/October 2009 - Peru Spending Hits a Block
Latin Finance - September/October 2009 - 47
Latin Finance - September/October 2009 - 48
Latin Finance - September/October 2009 - 49
Latin Finance - September/October 2009 - BCP Sees Better Days
Latin Finance - September/October 2009 - 51
Latin Finance - September/October 2009 - 52
Latin Finance - September/October 2009 - 53
Latin Finance - September/October 2009 - 54
Latin Finance - September/October 2009 - Caribbean Investment Report
Latin Finance - September/October 2009 - 56
Latin Finance - September/October 2009 - 57
Latin Finance - September/October 2009 - 58
Latin Finance - September/October 2009 - 59
Latin Finance - September/October 2009 - 60
Latin Finance - September/October 2009 - 61
Latin Finance - September/October 2009 - 62
Latin Finance - September/October 2009 - 63
Latin Finance - September/October 2009 - 64
Latin Finance - September/October 2009 - 65
Latin Finance - September/October 2009 - 66
Latin Finance - September/October 2009 - Sustainable Banking
Latin Finance - September/October 2009 - 68
Latin Finance - September/October 2009 - Legal Services Survey
Latin Finance - September/October 2009 - 70
Latin Finance - September/October 2009 - 71
Latin Finance - September/October 2009 - 72
Latin Finance - September/October 2009 - 73
Latin Finance - September/October 2009 - 74
Latin Finance - September/October 2009 - 75
Latin Finance - September/October 2009 - 76
Latin Finance - September/October 2009 - 77
Latin Finance - September/October 2009 - 78
Latin Finance - September/October 2009 - Parting Shot
Latin Finance - September/October 2009 - 80
Latin Finance - September/October 2009 - Cover3
Latin Finance - September/October 2009 - Cover4
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