Davivienda Lands Short Benchmark

Andean issuers continue to dominate the debt capital markets in January, with Colombia’s Banco Davivienda joining the sovereign in printing a new benchmark Tuesday. The order book for the $500m 2018 was heard reaching $5bn, trumping the $3bn demand the government got for its new $1bn 10-year. The Ba1/BB+ bank was able to fill the 5-year spot on its maturity profile at costs seen flat to its dollar curve. It priced at 99.742 with a 2.95% coupon to yield 3.00%, or UST+225bp, tight to UST+250bp-area guidance and UST+275bp-area initial talk. The bonds were up 0.25-0.50 points in the grey, according to a trader. “The deals are coming in too tight, but that doesn’t matter because Davivienda fills a sweet spot in the 5-year space,” says an investor following the deal. He notes a preference among the buyside for staying shorter in higher-quality credits at the moment. Credit Suisse and JPMorgan managed the transaction, coming after Davivienda lifted its borrowing authorization to $500m from $300m earlier this month. The sale follows a similarly well-bid DCM debut in June in the 10-year space, getting a 5.95% yield. Later last year, the growing bank closed the acquisition of the former HSBC subsidiaries in El Salvador, Honduras and Costa Rica.