Bond Issuers Wait and See

Three LatAm corporates are quietly wrapping up investor meetings this week, but with markets looking increasingly less inviting, there are few signs of immediate deal execution. While issuance has not been ruled out, bankers are waiting to see how euro-zone debt troubles evolve before taking the decision to pull the trigger. A day or two of stability could make all the difference. The uncertainty hanging over the broader debt markets is creating some urgency to print sooner than later, and the six borrowers that moved quickly to put deals to bed last week are looking smart. Companies finishing meetings today include pulp and paper company Celulosa Argentina, oil and gas concern YPF, as well Brazilian petrochemical credit Braskem. The Caribbean Development Bank was also expected to price a $200m 5-year FRN as early as this week, while gaming company Hillview has yet to move forward with a $100m 10-year NC3. For Braskem, which is rated Baa3/BBB minus/BB plus, this marks its first comprehensive roadshow since getting investment grades from both Moody’s and S&P. The borrower has long been considering a 30-year, but may opt for a less ambitious retap of its $750m 2021s, which have been trading at around 5.7%-5.6%, or even a new 2022, said one banker. However, Braskem has no need to raise funding and with its new high-grade status, the company is unlikely to relinquish ambitious pricing targets, say bankers familiar with the credit. BAML, HSBC and Morgan Stanley are taking the credit on the road. Meanwhile, Celulosa Argentina has been expected to issue an up to $150m 2018 (B2) this week through Citi and Credit Suisse, while YPF is showing investors an 8-year with an average life of 7 years (Ba2/BB minus). BNP Paribas, Citi, Credit Suisse, ING, Itau, Santander and Standard Bank have the YPF mandate.