Gildemeister Returns for Retap

Chile’s Automotores Gildemeister emerged Monday with a $100m retap of its existing 8.25% 2021 bonds, becoming the region’s first high-yield name to issue in the cross-border bond market this year. Books eventually grew to $450m on a deal that took the total outstanding size of the 2021 issue to $400m from $300m. The Ba1/BB rated auto distributor reopened the bonds at 102.267 to yield 7.90%, in line with 8% area price guidance following earlier 8.125% whispers. The scarcity value of Chilean high-yield paper attracted investors despite providing little new issue premium. “This is a good credit and represented a good opportunity to get involved,” says a participating New York-based EM portfolio manager who estimated a maximum 10bp concession. According to a bookrunner, the transaction was thought to give investors a 3bp concession based on a 102.500 price, or 7.87% yield, prior to announcement. “In short, Gildemeister got done with a minimal reopening concession at 7.90%,” notes a DCM banker away from the deal. The bond traded at 102.25 Monday afternoon in the grey, according to an investor. Proceeds from the issuance are mainly to be used to refinance existing debt. The auto distributor sold its original debut 8.250% 2021 NC5 bonds in May of last year, getting more than $1bn in orders, and pricing at par to yield inside of initial 8.375%-8.500% guidance. JPMorgan was sole bookrunner on the original debut and on Monday’s retap.