Scotia Peru Lands Tier 2

In its international DCM debut, Scotiabank Peru has raised $400m in new 2027 NC10 Tier 2 bonds, while getting $2.3bn in demand from at least 170 accounts. The Bank of Nova Scotia subsidiary priced at par with a 4.50% coupon, to yield tight to 4.625%-area guidance, which followed 5%-area price thoughts. Investors reported pricing inside of Banco de Credito del Peru’s (Baa3/BBB) $350m 2027 Tier 2 bonds trading to yield 4.70%-4.80% and seen as a direct comp despite differences in rating. “Bottom line great transaction and it shows the high quality credit of Scotiabank and fundamentally strong market. If you’re a good credit you will have sufficient oversubscription to tighten pricing and in this case below your peers,” says a DCM banker away from the trade. The 15-year subordinated step-up bonds have the fixed coupon for 10 years and then revert to a floating rate. Proceeds will be used to strengthen the bank’s capital. Bank of America Merrill Lynch, Goldman Sachs and Scotia managed the sale. The deal represents Scotia Peru’s first dollar offering since a $175m diversified payment rights securitization done privately in 2010, according to Dealogic data.