Colombian Bank Makes DCM Debut

Despite selloffs in many of the world’s equity markets Monday, Colombia’s Banco GNB Sudameris was able to emerge and price a $250m debut international bond. Investors demanded $900m of the subordinated Tier 2 bond, demonstrating a continued appetite for Colombian paper and allowing the bank to improve its capital structure. The Ba1/BB 2022 priced at par with a 7.50% coupon to yield in line with 7.5%-area guidance, and close to the midpoint of initial 7.25%-8.00% investor price interest. The bonds traded up 1.0 points in the grey, according to a trader. Bankers on and away from the deal comped the new bond against fellow Colombian bank Davivenda’s (Ba1/BB+) 10-year Tier 2, trading to yield 5.60%-5.65% Monday, with GNB pricing at a significantly wider spread due to the difference in systematic importance between Davivienda, as the third-largest Colombian bank, and Sudameris, the tenth-largest. The largest tickets were heard allocated to institutional accounts, followed by private banking, with a small portion allocated to hedge funds. The bank is using proceeds to improve its capital ratios and general corporate purposes. Bank of America Merrill Lynch managed the 144A/RegS transaction, which followed a roadshow in Latin America, Europe and the US. Last month, GNB agreed to acquire HSBC’s operations in Colombia, Uruguay, Peru and Paraguay, for $400m. The bank raised $130m in equity at the beginning of this year and plans to raise $70m before the end of 2012. Peru’s Coazucar is scheduled to finish a roadshow Wednesday, and possibly issue a $300m 2022 bond. The Oaxaca II and IV wind farms are also touring, ahead of a combined $332m issue.