Investors Delight in CentAm Debut

The Central American Bottling Corporation (Cabcorp) priced a $200m 2022 bond Thursday, upsizing from $150m in its international bond market debut. The Guatemala-based anchor bottler for Pepsi in Central America priced the notes at 98.235 to yield 7.00% with 6.75% coupon, tight to 7.75% area guidance. “The issuance went very well given its status as a high quality high-yield credit,” says one investor. The bonds were trading up 2.00 points in the grey Thursday afternoon, according to an investor. Demand for the producer, distributor and marketer of drinks of various kinds was heard at 10x. While difficult to comp, the deal was thought to offer investors at least 40bp-50bp over where a hypothetical new Guatemala 10-year sovereign bond could issue. “There is not much in Guatemala, so with this issuer at 1.0x levered and as a soft drink bottler it was bound to do well,” says an EM investor. Citi was the sole lead on the Ba2/ BB/ BB+ transaction. Cabcorp is controlled by the Castillo family, with Pepsico holding an 18% stake. Cabcorp expanded into the Caribbean in 2009 when it bought PepsiAmericas and its territories in Puerto Rico, Jamaica and Trinidad. As of September 30, 2011, short-term maturities only amounted to $19m, versus $85m of cash on hand, according to Moody’s.