BTG Pactual Gives Little in $1bn Sale

Banco BTG Pactual was seen giving up less than 10bp concession in a $1bn 2020 bond sale that drew more than $6.5bn in orders. The Brazilian bank becomes the first non-sovereign to tap the DCM in 2013, and should be followed by at least three other borrowers today. BTG was able to tighten significantly as it built a $3bn book by 10:00am Wednesday. The Baa3/BBB minus senior bond priced at 99.247 with a 4.00% coupon to yield 4.125%, or UST+286.1bp, the tight end of 4.25%-area guidance brought in from wider 4.50% initial price thoughts. “Nice trade. Whispered cheap, then ratcheted down,” says a DCM banker away from the deal who calculated flat to 10bp concession to BTG Pactual’s 2016 senior bonds, on a curve adjusted basis. The bond was heard trading up about 0.25 points in the grey Wednesday afternoon. “Four percent was the line in the sand. There hasn’t been a ton of issuance in the space right now and with a lot of sub paper, this is shorter-senior [debt], though pricing wasn’t incredibly attractive for investors,” says a New York-based EM investor, noting fair pricing at 4.125%. Demand came from 367 accounts and featured US, EMEA, and LatAm accounts, with asset managers accounting for bulk of demand, according to bankers on the deal. The notes are part of a global medium-term notes program of up to $3bn with proceeds to be used to enable new business generation. Bank of America Merrill Lynch, Banco do Brasil, Bradesco, BTG Pactual and Santander managed the deal done through BTG’s Cayman branch. A greenshoe option of 5% is available during Asian market hours. Chile’s CorpBanca and Automotores Gildemeister, as well as Colombia’s Empresa de Telecomunicaciones de Bogota are expected to issue bonds as soon as today.