BTG Prices Tight End Of Talk

Brazilian investment bank BTG Pactual priced its debut $500m 5 year senior bond Thursday after building a $1.25bn book that allowed it to come at the tight end of 5.125% area guidance. Many investors liked the story but wanted a bigger cushion to compensate for recent volatility. Hopes of locking in a decent pickup to Banco Votorantim’s 2016s faded when the paper priced at 99.453 with a 4.875% coupon to yield 5%, coming in line with initial low 5 whispers. Votorantim’s 2016s had been trading in the high 4s and arguably BTG came inside where a new BanVor trade would have printed. Such levels failed to excite some accounts, though enough buyers stayed at 5% to allow leads to cross the finish line and achieve their pricing goals. Leads were heard taking the 50bp to 80bp spread differential typically seen between bonds issued by a large US commercial bank like JPMorgan and those from pure investment banking names like Morgan Stanley or Goldman Sachs, and then applying it to the Brazilian market. From that perspective, BTG came some 75bp wide to a new 5 year from large Brazilian commercial banks like Bradesco and Itua, which leads argued would yield around 4.25%.