Celara Rolls Out New 10-Year

Chilean pulp and paper company Celulosa Arauco (Celara) has rolled out its first bond issuance of the year, a $500m 10-year that drummed up about $2.5bn in orders with participation from nearly 200 accounts. The Baa2/BBB/BBB plus 10-year priced at 98.530 with a 4.75% coupon to yield 4.938%, or UST plus 295bp, in line with plus 295bp area guidance. Demand was healthy with the deal being 5x oversubscribed. Leads were heard citing a new issue premium at around 10bp, calculating from a Wednesday morning G-spread level of 285bp on its existing 2021s. One non-participating EM portfolio manager estimated a 27bp premium versus Celara’s 2021s, which he spotted at 248bp after accounting for a tenor extension. “It was a fair deal,†the investor adds. Proceeds will be used to refinance existing debt and for general corporate purposes. The bonds were trading in the grey at reoffer plus 3/8, according to an investor. Participation came from a mix of Latin American, US, and European accounts. In September 2010, Celara came with a $400m 5% 2020, which was priced to yield 5.12%. Itau, JPMorgan and Scotia managed the most recent 144A/RegS transaction.