BRF Returns for Well-Bid Retap

Brasil Foods emerged Wednesday with a $250m retap of its existing 2022 bond, with order books reaching $1.8bn. The Baa3/BBB minus Brazilian food products company reopened the 5.875% coupon bonds at 102.839 to yield 5.50%, in line with 5.50%-area guidance, revised from 5.625%-area. Brasil Foods’ limited outstanding issuance and status as a strong credit attracted investors, despite little new issue premium. According to market participants, the transaction was thought to give investors a 5bp concession based on a 103.00 price, or 5.47% yield, prior to announcement. “There is a lot of cash to be put to work and there are windows for high-grade names,” says a banker following the process. Proceeds from the issuance are mainly to be used to refinance existing debt. Banco do Brasil, HSBC, Itau and Santander managed the transaction. The sale brings the total outstanding size to $750m, following a $500m sale in June. The issuer had been heard looking at a $750m size in June, but opted instead to issue $500m amid market volatility and return for a retap upon an available window. The original sale came at a 6.0% yield, and got $1.66bn in demand.