High-yield Debt Issuers Start to Line Up

With the US Fed’s QE3 decision out of the way and some well bid high-grade bond offerings in the books this month, LatAm’s expected high-yield pipeline is beginning to take shape. Peruvian home improvement retailer Maestro and Colombia Telecomunicaciones (Coltel) plan to meet investors ahead of new transactions, hoping to take advantage of demand for corporate paper from their two countries. Colombia Telecomunicaciones is considering a benchmark-size 2022 bond denominated in USD or Colombian pesos, according to sources familiar with the plans. Fitch notes a $750m expected size when assigning a BB rating. Coltel merged its fixed operations with Telefonica Moviles Colombia in June, and is 70% owned by Telefonica (BBB) and 30% by the Colombian government. The partial government ownership makes pricing tricky, but a banker familiar with the issuer’s plans sees a starting point at the Colombian sovereign as well as the Telefonica parent’s 10-year dollar bonds, quoted at a spread of UST+400bp Thursday. The roadshow starts in Bogota and Santiago today and visits accounts in London and Lima Monday, and Boston on Tuesday before wrapping up in New York and Los Angeles Wednesday. Credit Suisse, HSBC and JPMorgan are managing. Meanwhile, Peru’s Maestro is heard planning to raise $180m through a 7-year bond, according to Fitch, which assigns a BB minus rating. A 10-year tenor is also heard being considered, as the issuer seeks to address at least $100m in debt and fund $80m in capital expenditures. Intercorp Retail Trust’s (B1/BB minus) 2018 bond, trading to yield 6.56% Thursday, is considered a direct comp. Fixed-income investor meetings commence Monday in Los Angeles, followed by visits to accounts in Boston Tuesday, New York Wednesday, Lima Thursday and Santiago on Friday. It will then visit accounts in Zurich and Geneva the following Monday before wrapping up in London September 25. Bank of America Merrill Lynch and JPMorgan are managing the transaction