EEB Seeks Foreign Bond to Fund Call

Colombian utility Empresa de Energia de Bogota (EEB) is considering the international bond markets to finance an upcoming call on its $610m 8.75% 2014s. The move makes sense in light of what are still low US interest rates and the three main rating agencies’ unanimous agreement on the sovereign’s investment-grade status, bankers say. The NC4 senior unsecured notes were issued in 2007 to partially pay down a bridge loan used to finance the $1.5bn acquisition of natural gas distributor Ecogas. With the call date looming on October 31, EEB’s bonds were trading Friday at 2.24%-3.64% on a yield-to-worst basis or at 106.00-106.50 on price. The bonds are callable in October at 104.375, at 102.188 in 2012 and at par in 2013 and thereafter. The bond also carries a make-whole call prior to year four at 75bp and a change of control put at 101.00. “This is a very large chunk of debt for a Colombia issuer so it makes sense for them to issue,” notes a banker familiar with the transaction ABN AMRO, now RBS, was the sole bookrunner on the last issue with BBVA, Caylon and Mizuho working as joint lead managers. EEB spokespeople declined to comment about timing and possible mandates for the transaction.