Alpek Upsizes Bond Debut

Mexican petrochemical producer Alpek has raised $650m in the debt capital markets, getting $4.6bn in demand from its first-ever international issuance and upsizing by $50m from initial expectations. Whether the UST+295bp level came inside of peer Mexichem (Ba1+/BBB minus) depends on who is asked, with investors and bankers spotting Mexichem’s 2022 at 290bp-300bp levels. The BBB minus/Baa3 Grupo Alfa-controlled polyester and plastics specialist priced at 99.713 with a 4.5% coupon to yield 4.536%, or UST+295bp, the tight end of UST+305bp (+/-10bp) guidance following earlier low-300bp whispers. The bonds were up 0.83 points in the grey Thursday afternoon, according to a trader. “The issuer is a big part of Alfa group, the deal comes with guarantees and though Alpek has lower margins than Mexichem, Alpek is less levered,” says a New York-based EM investor looking at the deal. Though the pricing was too tight for many, the buyside welcomed the opportunity for diversification away from Brazil in the LatAm petrochemical space. Approximately 275 accounts participated, with North American buyers comprising 60%, Europeans 30%, Latin Americans 5% and Asians 5%. Fund managers made up 60% of the book, private banking 20%, insurance and pension funds 15% and other investor types totaled 5%. The senior unsecured bond comes with guarantees from Grupo Petrotemex and its main subsidiaries. Proceeds will be used to address a syndicated loan. Citi, Goldman Sachs, HSBC and JPMorgan managed the transaction. Next up in the region’s DCM is Costa Rica, expected with a $1.bn benchmark today. Mexico’s Posadas is also expected soon with a new bond, as it conducts a liability management exercise.