Southern Copper Headlines DCM Rush

Peru’s Southern Copper (SCC) raised $1.50bn on a day that saw $4.55bn in LatAm DCM issuance, as the backlog caused by last week’s severe weather in the US was cleared. Facing 2Q numbers going stale and today’s US elections, several issuers who met investors last week were eager to get their deals out the door. “It sounds cliche, but the market has a lot of cash to put to work and anything down the middle in terms of risk is doing pretty well. We’re seeing a lot of supply and will continue to do so in the coming weeks with little windows of stability,” says an EM-focused fund manager perusing Monday’s various offerings. SCC picked up with plans it put off for a dual-tranche issue in September, funneling most of the funds into a $1.3bn 2042 bond and continuing the trend of LatAm issuers locking in low rates for the long-term. A $300m 2022 priced at 99.657 with a 3.500% coupon to yield 3.541%, or UST+185bp, tight to 200bp-area guidance that followed low 200bp price talk. The$1.2bn 2042 priced at 98.207 with a 5.250% coupon to yield 5.371%, or UST+250bp, at the tight end of 260bp-area guidance that followed mid-to-high 200s price talk. The 10-year level was seen coming versus a G-spread of about 215bp for the issuer’s outstanding 2020 bond, with the issuer’s outstanding 2040 trading at about 260bp prior to launch. The Baa2/BBB/BBB Peru-based unit of Mexican miner and railroad operator Grupo Mexico saw $7bn in demand, slightly more of which fell into the long tranche, according to bankers on the deal. More than 250 accounts bought the 10-year, and more than 200 played in the 30-year. The bulk of buyers came from the US and Europe, with some participation from LatAm-based investors. Bank of America Merrill Lynch, Credit Suisse, HSBC and Morgan Stanley managed the sale. SCC cancelled a roadshow in September following the announcement of a US court judgment against Grupo Mexico. It raised $1.5bn in 2020 and 2040 bonds in April 2010.