Latin Finance - January/February 2011 - 8

Debt

Pipeline Builds

service agreements with Petrobras. Santander, HSBC, Deutsche Bank and Banco do Brasil managed the sale, rated BBB/Baa3.

Revived European debt woes put a lid on last year’s bumper DCM volume, which was fuelled by unprecedented fund inﬂows and Brazil’s global real comeback following a three-year hiatus set o tantalizingly low rates for borrowers. Pipelines are nonetheless a rush of corporates and banks from as far away as Russia. Brazil huge, and all eyes are on the January sales. sold 1.0 billion reais in an October tap of its 10.25% of 2028 “There is still a lot of liquidity out there, and there is still a compelling case for a lot of funds to buy EM debt,” says Eduardo bonds, to yield 8.850%. The sovereign plans to return for more Suárez, corporate credit analyst at RBC. Suárez sees issuers with in 2011, especially after the rise to 6% in the IOF tax made the format more attractive to investors. large capex needs, such as Petrobras, Anheuser-Busch InBev, which has Vale, and Pemex, looking to lock in DCM Rank by Volume, Year to November 29 the LatAm assets of AmBev, followed attractive rates. HSBC tops the charts with 750 million reais in global 2015s. Bankers say issuers that opted Rank Bookrunner Value $m # Deals The Baa2/BBB+ 9.750% deal priced not to pull the trigger in November 1 HSBC 11,221 50 at par and traded around 100.5 in and December are ready to go in 2 Deutsche Bank 11,043 33 early December. It was led by Barclays, January. Developer Cyrela had been 3 Citi 10,376 34 Deutsche Bank and Itaú. considering a perpetual or globalBankers, already pitching local, through Credit Suisse, Itaú 4 BofA Merrill 9,744 43 sovereigns and LatAm corporates and Morgan Stanley. Chilean banks 5 JPMorgan 9,650 34 with global local currency structures, including BanChile and BCI were 6 Credit Suisse 8,566 28 expect more issuer candidates to considering new deals. Jumbo deals 7 Santander 6,879 30 emerge among global companies with from Brazil, Colombia and Mexico are 8 Goldman Sachs 4,649 11 sizeable LatAm assets. also standard practice in a new year. 9 Morgan Stanley 3,812 13 Itaú pushed out a 500 million A benchmark-size dollar debut from 10 Banco Itaú 3,677 24 real bond before European volatility Chilean retailer Cencosud was also in slowed the market, paying 10.5% on Subtotal 79,616 161 the works. its Baa2 2015 bond, while o ering Telemar met European investors Total 100,293 191 a 0.50 real concession to private in December, looking to either hit Source: Dealogic banking investors to build a 800 markets before the holiday season million real book. Itaú, Deutsche and or wait for 2011. Water utility DCM Rank by Fees, Year to November 29 Morgan Stanley led, and the bond Sabesp made the same choice Citi outperforms on revenue traded at 101 in early December. after meeting dollar-denominated Rival Bradesco opted to wait for better accounts. Banco do Brasil, Espírito Rank Bookrunner Revenue $m % Share markets, however, on its own 2015 Santo, HSBC and Santander showed 1 Citi 60 18.50 real bond, likely of a similar size. Telemar, while Sabesp toured with 2 Deutsche Bank 32 9.90 Barclays, Bradesco and Citi are on that Itaú and Santander. Investors also 3 BofA Merrill 31 9.70 deal, which should return this year. awaited deals from quasi-sovereigns 4 JPMorgan 31 9.60 Russian bank VTB also tried to Eletrobras, at perhaps $1 billion, and 5 Credit Suisse 30 9.30 get in on the arbitrage of funding Peru’s Coﬁde, at up to $300 million. Subtotal 185 56.90 in reais, but postponed a 2015 in Smaller Argentine issuers are also Total 325 100.00 rough markets. BTG Pactual had the emerging. In December, Aeropuertos mandate. Source: Dealogic Argentina 2000 was considering a Global local currency issuance is $300 million deal through Credit not just for big shots. Mexican lender Consupago has raised 750 Suisse and Morgan Stanley, and the holdco for Argentine million pesos in 2013 bonds, at a 10% yield. BCP Securities and Gaming Group readying a $100 million trade through BCP GBM International managed the BB- sale. Securities. Both would follow a $200 million November sale And Peru raised a hefty $1.5 billion equivalent in reopened from Arcor that demonstrates appetite for solid credits from higher-yielding addresses. The B1/B+ candy maker’s 2017 got a sol-denominated 2020 notes, part of a sale that included $1.0 billion in new 2050 dollar bonds. The Baa3/BBB+/BBB global 7.25% yield through JPMorgan and Santander, on $2 billion in 7.84% of 2020 reopened to yield 5.750%, and the Baa3/BBB orders. 2050 priced to yield 5.875%. Bank of America Merrill Lynch and Odebrecht lifted spirits of those hoping to see more project Morgan Stanley managed the sale. LF ﬁnance hit the bond market. The Odebrecht Drilling Norbe VIII/IX unit priced a $1.5 billion 2021 bond with an 8.1-year UPDATE > average life at a 6.375% yield in November, to $5.5 billion in demand. Proceeds reﬁnance debt at two nearly-completed For daily local and international DCM news, see www.latinﬁnance.com ultra-deepwater drill ships that have signed 10-year charter and

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January/February 2011

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Latin Finance - January/February 2011

Table of Contents for the Digital Edition of Latin Finance - January/February 2011