Peruvian Debutant Tightens Bond

Peruvian retailer Maestro has raised $200m in its international DCM debut, getting close to $2bn in orders. Despite a small size and lack of familiarity with the credit, the 2019 NC4 bond was able to continue the trend of strong bids and aggressive pricing seen in the markets this month. The Ba2/BB minus bond priced at par with a 6.750% coupon to yield at the tight end of 6.875%-area guidance, revised from 7.125%-area. The bond was heard up around 2.0 points Friday afternoon. IFH Peru’s (BB minus/Ba3) 2019 offered the closest comp, according to the buyside, and had been trading around 6.0%. “This is aggressive pricing for such a levered company, but they are getting the benefit of the doubt,” says an EM investor following the sale. Starting from 3.6x as of midyear, Fitch expected gross leverage of 5.5x post-transaction, falling to 4.0x-4.5x by the end of 2014. The home improvement retailer is raising funds to address some $100m in debt and fund approximately $80m in capital expenditures, in addition to general corporate purposes. Maestro is implementing a PES545m ($209m) capex plan during 2012-2014. Bank of America Merrill Lynch and JPMorgan managed the transaction, with Scotia and Larrain Vial as co-managers. The issue was upsized from an originally planned $180m. Maestro is controlled by Enfoca, a Peruvian private equity fund, and has 20 stores across the country.