Codelco Mines Tight End

Playing on its scarcity value and hunger for paper, Coldelco has raised $1bn in new 2020 bonds at the tight end of talk. The A1/A bonds priced at 98.239 with a 3.750% coupon to yield 3.965%, or UST plus 130bp, the tight end of 135bp area guidance. “This was fairly priced, with a very limited upside, perhaps 10bp-15bp,” Diego Torres, corporate debt analyst at Santiago-based Munita, Cruzat y Claro, tells LatinFinance. Codelco’s 2019s traded around UST+115bp in the secondary market, according to investors, with the Chile sovereign 2020 giving UST plus 70bp-75bp. “With rates where they are, high-quality LatAm companies have been getting very good deals, and we have seen it again with Codelco,” says Torres. The infrequently issuing Chilean miner brought in $3.5bn in demand, according to bankers on the trade. The bonds were heard up 0.5-1.5 points in the grey at the end of the day Thursday. Codelco plans to use proceeds to partially finance capital expenditures and refinance existing debt obligations. Deutsche Bank and HSBC managed the sale. The book was about 80% US investors skewed toward high-grade dedicated accounts rather than EM, say bankers on the deal. First bond since a January 2009 sale of $600m of 2019s.