Province of BA Returns for Another $250m

The Province of Buenos Aires re-emerged Thursday with a cheap $250m retap of its 11.75% 2015 that moved the borrower’s underlying curve wider and made for a volatile day in the secondary markets, investors say. “They priced it to move but the whole curve suffers,” says an EM portfolio manager who passed on this issue but participated in the last retap. Before the announcement the bonds were being quoted at around 104.20 to yield 10.48%, only to fall to 103.00 or 10.83% after news of the retap emerged. According to one account, the bond dropped as low as 102.50 before recovering to around 103.00. Leads were heard whispering 11% before generating a $650m plus book and pricing at 102.854 to yield 10.875%, allow them to surpass the initial $200m target size. “It is hard to find credits that are so attractively priced. It was too cheap not to [participate]” says an EM portfolio manager who bought into the trade. The reopening brings the outstanding size to US$1.05bn. Ratings are B3/B on the 144A/RegS, New York law bond. Settlement is T+5, with maturity falling on October 5 2015. Bookrunners were BAML and Deutsche Bank. The same banks brought the province’s $250m retap of the 2015s in October last year and they also lead the original $550m deal in September 2010 when it was priced at 99.076 to yield 12%.