Arauco Hops Into Bond Queue

Chile’s Celulosa Arauco y Constitucion has added its name to the list of LatAm issuers looking to jump on investor demand before the summer hiatus. The producer of pulp and wood products is preparing to sell a “benchmark size” 2019 dollar bond. The BBB/Baa2 issuer begins investor meetings today on the US West Coast, followed by visits to Boston Monday and New York Tuesday, with a sale to follow, depending on market conditions. JPMorgan is managing the process, with BBVA and Santander as passive bookrunners. The issuer this week was downgraded to BBB from BBB+ by S&P and had its outlook lowered to negative from stable by Moody’s, amid concerns about short-term leverage. It sold $146m equivalent in 2014 and 2030 bonds on the domestic market in March, and last visited the dollar market in 2005 with a $400m 5.625% 2015, also via JPM. The mandate represents the latest in a string for JPMorgan, following Ecopetrol and EPM. JPMorgan and Credit Suisse are rumored to be running a bond deal for Trinidad’s Petrotrin, and JPMorgan is likely to score a mandate for a dollar issue later this year from Brazil’s Cemig, after conducting the borrower’s non-deal road show this Spring.