Brazil and Peru MT100s Looming

Peru’s Interbank and Brazil’s Bradesco are weeks away from landing a combined $250m in DPR issuance. While margins have risen substantially in this market, the region’s top financials are finding they can easily pass on the higher costs to corporate clients, which have few alternatives to accessing dollars. Peru’s Interbank is set to issue $150m across 2 tranches. The deal is split into a $120m 6-year, and a $30m 10-year. A person close to the process estimates the all-in cost for the borrower at the equivalent of around 500bp-600bp over Libor, calculated by using the Peru 5-year CDS and adding 150bp. Deutsche Bank is heard leading, and S&P has assigned a BBB rating to the series, set to be priced as soon as late March. In Brazil, Bradesco is warming up a bilateral placement of $100m in 2015 notes via WestLB. Price discussions there are heard starting from Libor plus 300bp area. S&P rated a similar $500m deal from the bank in December at single A. In Jamaica, NCB was looking to issue $50m via Credit Suisse but had to pull out following a sovereign downgrade. Bankers are eyeing new markets for DPRs, including Chile and Mexico. MT100s are done either on a biltateral basis with an underwriter, or placed with a select group of institutional investors, such as insurance companies and multilaterals.