Corp Group Raises $500m

Corp Group Banking has become the latest LatAm borrower to cash in on continued investor appetite, particularly for Chilean high-yield names, getting about $2bn in demand for a new $500m 2023 NC5 bond. The Ba3 holding company for CorpBanca priced at 99.985 with a 6.75% coupon to yield 6.75%, at the tight end of 6.75%-7.00% guidance brought in from high 6% to7% talk. The bond grew from the $300m size expected during marketing, and was seen trading up 2 points in the grey, according to traders. Participating investors highlighted the holding company’s paying for subordination and being structurally designed to take advantage of CorpBanca dividend streams, as well as a pickup to CorpBanca’s 2018s. Portfolio managers not keen on Corp Group fundamentals and the negative rating outlook opted out. Bankers on the deal say the sub-investment grade deal priced 200bp behind CorpBanca (Baa1/BBB+). The three-notch differential between subsidiary and holdco reflects the structural subordination of the holding company’s debt holders to all liability holders of the regulated operating companies and to all other creditors of the operating companies, according to Moody’s. Proceeds from Tuesday’s sale will be used to repay Corp Group’s existing debt as well as group debt. Deutsche Bank and Goldman Sachs managed the sale. CorpBanca earlier this month raised $800m from the sale of a 3.125% 2018 bond.