BESI Enlarges Bond Comeback

BES Investimento proved enduring love for Brazilian bank credit with a $500m 2015 priced at 98.930 with a 5.625% coupon to yield 5.875%, or T+346.3bp, well through initial guidance. Size was said by bankers on the deal to have been lifted from an initial $300m after investors placed $2.5bn in orders. However, a source familiar with the issuer says it had always intended to raise $500m. Official guidance was 6.000%-6.125%, revised to 5.625%-6.000% and the deal was heard up 2pts in the aftermarket. By contrast, Brazil’s Banco Bradesco earlier in the week raised $750m in 5-year notes at 99.996 to yield 4.101%, or UST plus 175bp. This was an upsize from $500m and at the tight end of a 175.0bp-187.5bp over UST guidance on the Baa2/BBB trade. For BESI, Asian investors ordered more than $500m, European around $850m and the US buyside demanded $1.25bn, says a person close to the issue. Institutional, private banking and retail were among the buyers. The deal for the Portuguese bank’s Brazil unit was pulled in early February amid fears of default in Greece, Portugal and Spain that hammered LatAm fixed income. The Baa2/BBB minus was through Deutsche Bank, Espirito Santo and Standard Bank. Co-managers are BB Securities and BBI. Use of proceeds are for general corporate purposes and debt refinancing. The issuer typically funds locally at very short term.