Cencosud Mulls Global CLP

Chilean retailer Cencosud, which is roadshowing a likely dollar bond, is also heard considering adding global CLP to the mix. The retailer, scheduled to wrap up the “non-deal” US, European and LatAm meetings Tuesday, is heard looking to do a 10-year bond for up to $1bn and may also add a CLP tranche, according to investors following the process. Investors estimate a dollar debut from Baa3/BBB minus Cencosud to come in the neighborhood of UST plus 225bp-275bp. Direct comps are difficult, though some point to the most recent triple B Chilean pure corporate, paper maker Arauco (Baa2/BBB/BBB+), which got a 5.115% yield, or UST plus 245bp in September on a $400m 10-year. Arauco now trades at UST plus 155bp, according to a trader, who notes a good part of the tightening is owed to UST movement. Chile’s largest retailer benefits from strong business and geographic diversification and focus on the defensive food retail sector, Moody’s notes. Investors weigh such positives against an ambitious 2011 expansion plan, high leverage, and risk associated with about 30% of its business in Argentina. Deutsche Bank, JPMorgan and Santander are managing the investor meetings. Also in the pipe for this week are BRMalls, seeking a NC5 perpetual through BTG and Deutsche, and Banco do Brasil, aiming to place a new euro-denominated bond. Both are scheduled to start roadshows today. Brazil’s Banco Cruzeiro do Sul is also expected to initiate the sale process for a senior 5-year bond as soon as this week.