Scotiabank Trims DPR for Lower Spread

Peru’s Scotiabank has raised $175m in diversified payment rights (DPR) bonds in its first visit to the capital markets using the future flows structure, say executives familiar with the trade. The bank had launched at $200m, but opted to reduce size to secure attractive pricing, say bankers on it. Rating agencies had assigned their respective A/A minus scores for an up to $250m issuance. A $50m 7-year final fixed rate tranche came at 5.25% while a $125m floating rate piece with the same tenor came at Libor plus 275bp. The fixed rate piece was done to satisfy reverse inquiry from one investor, according to executives leading it. The average life of the bond, which is backed by financial flows, is 4.8 years. Proceeds are for balance sheet management and asset/liability matching. As such, the issuer is very price sensitive, says a banker on the deal. He adds distribution for the deal, which included a roadshow for the debut issuer, counted on a book with over 20 distinct entities including pension funds, insurance companies, asset managers and corporates. Almost all are based in North America. Credit Suisse led the deal.