Sleepy DCM Awaits Usiminas Issue

It’s shaping up to be a slower first half of January than usual in LatAm DCM, with uncertainty about external conditions keeping issuance volume well below last January’s seasonally brisk spree. High-yield issuers appear to be waiting to see what pricing Brazilian steelmaker Usiminas is able to get on a $400m 2018 notes issue. The Baa3/ BBB- deal is now roadshowing, taking in Los Angeles, New York, Boston and London, with pricing expected as soon as Friday. Bankers away from the transaction, led by JPMorgan and UBS expect a yield in the low 7% area, owed to the issuer’s strong name and low outstanding debt. If the market opens up, other high-grade frequent issuers could follow, notes one banker, while the high-yield deals yanked late last year may continue to wait. Sovereigns are in no hurry, the banker adds.