Aval Lands Debut Debt Deal

Colombia’s Grupo Aval priced a $600m 5-year bond Wednesday, its debut in the international bond market. The Colombian holding company priced the bond at 99.458 to yield 5.375% with a 5.25% coupon, tight to 5.5% area guidance and nicely inside earlier 5.5%-5.75% whispers. Book size reached north of $4.5bn in demand. The debut issuer was being comped against its own Banco de Bogota banking unit, which priced in December a $600m 5.0% 2016 bond to yield 5.25% and was trading at around 4.9% area Wednesday. Also, given Aval’s holdco status, investors had been asking for a premium over Banco de Bogota, with some looking at Bancolombia subordinated 2020s as a possible starting point. Those subordinated bonds were recently trading at around 5.75% bid, while Bancolombia’s 2017s were being quoted at around 4.9%. “The deal was attractive versus other banks,” says one participating portfolio manager. The bonds traded up 1 point in the grey Wednesday afternoon. JPMorgan and Goldman Sachs managed the sale, rated Baa3/BBB minus.