New Geo Issue Trades Up

A new 2014 bond from Mexican homebuilder Corporacion Geo was heard up 2 points in the gray Friday afternoon, after pricing Friday morning. Geo priced $250m of the Ba3/BB minus notes at 99.505 with an 8.875% coupon to yield 9.000%, or UST plus 659.6bp, through initial 9.500% area guidance, which was revised to 9.375% area. The book was heard at $750m-$1bn. “If you believe that Mexico will follow the US in an upswing, it’s an attractive credit,” says a New York-based EM investor, who sees 50bp-100bp further tightening in the bond. Proceeds will be used to refinance existing debt as well as for working capital. Morgan Stanley and Santander managed the sale.