Tarjeta Bags Tight 2017 USD Debut

Tarjeta Naranja, the Argentine credit card company controlled by Banco Galicia, has raised $200m from the sale of a new 2017 bond, its first in the dollar market. The issuer clinched a 9% yield where many had expected a higher handle. However, the bond was heard up in the gray, and demand reached $600m, according to a banker on the deal. The B rated bond priced at par with a 9.0% coupon to yield in line with 9.0% area guidance. The bond was up 1.00-1.25 point Tuesday afternoon, according to traders. “The 9% level seems tepid as Argentina still labors under a perception of being unfriendly to global markets,” Eric Ollom, head of EM corporate credit research at Jeffries tells LatinFinance. “There is higher yielding paper in the country that should outperform in the general market consensus of Argentina as an improving credit,” Ollom adds. He also notes a preference to play an improving Argentine situation via the provincial debt, which tends to offer higher yields and more liquidity than corporates. Closest comps include a Banco Hipotecario (B) 2016 trading to yield 8.75% and a Banco Macro (B/B2) 2017 trading to yield 7.7%, according to investors. The amortizing bond has a 4.5-year average life and pays off in 3 equal installments in years 4, 5, and 6. Proceeds are marked for general corporate purposes. Bank of America Merrill Lynch and Deutsche Bank managed the sale. Tarjeta Naranja offers its own branded cards, as well as Visa, MasterCard and American Express, to the middle income segments of the population, and is Argentina’s second largest credit card provider.