Chilean Bank Debut Lures Buyside

Chile’s Banco de Credito e Inversiones (BCI) raised $600m in its first-ever dollar bond sale, with investors putting in for $3bn in orders. The 2017 was one of three issuances Thursday, in what has been a busy week for cross-border sales. The A1/A rated lender got the large demand despite tightening to UST+245bp yield from whispers of mid-to-high T+200bp. “The bank offered some concession, which isn’t bad for a 5-year single A name which is considered one of the largest banks in Chile,” says a New York-based EM investor following the transaction. The bond priced at 99.426 with a 3.000% coupon to yield 3.125% or UST+245bp. The bonds were up nearly a point in the grey, according to an investor. Though difficult to comp, leads were heard looking at a Banco de Estado de Chile (Aa3/A+) as a general reference point. Banco Estado de Chile’s 3.875% of 2020 bond, sold in February, traded at around 3.0%, or UST+140bp, Thursday. “BCI is a cash substitute as we are barely getting 3.0%, but there is demand for high-grade issuers and we are comfortable with the credit despite tightening,” says a participating EM investor. The issuer likely paid above what it might in the domestic market, where it is a frequent issuer, but gains size and diversity, according to people following the trade. Citi and JPMorgan managed the sale, which followed a US and European roadshow. BCI had planned a cross-border sale in 2010 but postponed in favor of a local market deal. BCI’s most recent issuance was a MXP1bn ($79m) 2013 bond in Mexico’s domestic bond market. More than $6.75bn has been issued in the cross-border market this week, making it one of the busiest since the first quarter. “We have to catch up,” says a LatAm DCM banker, noting that the strong issuance should continue through at least the end of the month, barring abnormal news from Europe. Mexichem is heading the list of names that could appear next week.