Peruvian Bond Debutant Bottles Massive Demand

Peru’s Ajecorp generated close to $2.6bn in orders for its $300m international bond debut, ratcheting down its yield well below expectations. The 2022 NC5 priced at par with a 6.50% coupon, to yield at the tight end of 6.50%-area guidance, which had been revised from 6.75%, and followed 7.00% whispers. “Great deal and great momentum,” says an EM investor following the trade. “Ajecorp took advantage of supply in the market and priced well given demand,” says a DCM banker away from the deal. The bonds were trading up a point in the grey late Tuesday, according to investors. The BB/BB+ producer and distributor of soft drinks including the Big Cola brand was directly comped against compatriot BB+/BBB minus Coca-Cola bottler Corporacion Lindley, whose 6.75% of 2021s traded to yield 5.60%-5.90% Tuesday. Ajecorp offered investors a 50bp pickup versus where a new Lindley 10-year would price today, according to bankers and investors. At least 160 accounts participated in the deal, with US accounts representing 54%, LatAm 25%, Europe 17%, and Asia 4%. Asset managers, pension funds and private banking took the top tickets. The issuer is raising funds to repay a $100m unsecured loan with Rabobank, a $38.6m secured credit facility with Interbank, and other debts. Ajecorp is a Netherlands-incorporated subsidiary of Grupo Embotelladora Atic, a holdco for the Ananos family, which controls the bottler known as Aje. The notes are unconditionally guaranteed by Atic and some of its subsidiaries. Bank of America Merrill Lynch led the deal, with Interbank, Jefferies and Rabobank acting as joint lead managers. The deal followed a 3-continent road show which put the issuer in front of more than 100 investors. More Peruvian debutants are expected this year, with investors hungry for defensive credits out of a country that has produced relatively few international corporate issuers to date.