BBVA Continental Sees Well-Bid Sale

Peru’s BBVA Continental has raised a $300m bond, capitalizing on Peru’s booming growth and investor appetite for Andean credits to generate $2bn in orders. The BBB/BBB+ bank priced the 3.5-year bond at 99.786 with a 2.250% coupon to yield 2.314%, or UST+195bp, the tight end of UST+205bp-area guidance and low-to-mid 200bp initial talk. The new 2016 bond was trading up 0.125 in the grey Tuesday, according to traders. Both people on and away from the transaction comped the bond against Banco de Credito del Peru’s (BCP) 2016 bonds which were quoted at UST+195bp. The new bond also priced through Continental’s outstanding 2017 bonds, quoted at UST+235bp, according to bankers on the sale. The leads say the 3.5-year maturity was chosen to fill a gap in the issuer’s curve. “The fundamentals for Peru and Latin America are there and that is why they are able to access this kind of demand,” says a debt analyst following the credit. BBVA is looking to access more competitive funding costs in the international market as it seeks to expand its loan portfolio, he notes. US buyers accounted for about 55% of the deal, with about 32% coming from Europe and the remainder from other regions. Fund managers drove the bulk of demand, comprising 75% of the order book. BBVA, Bank of America Merrill Lynch and Citi managed the sale, rated BBB/BBB+.