Guatemalan Waits on Bond Debut

Guatemalan sugar producer and exporter Ingenio Magdalena has decided to postpone plans to issue its first international bond, citing pricing disconnect and treasury volatility, Rudy Maza, the issuer’s financial planning and risk manager tells LatinFinance. “We will look for a new window in 2014,” he says. He highlights a widening of the 10-year UST to 2.77% and a preference to revisit debut bond plans under more favorable market conditions and following the February US Fed meetings. With Brazilian sugar producers trading in the high double digits, Maza notes the difficulty in convincing buyside investors to buy into a challenging sector. “That was the main challenge, but Ingenio Magdalena is not Brazil,” he says. Magdalena found recent Guatemala deals trading in the 7%-area as interesting pricing points for its debut, despite differences in rating and sector. Ingenio was looking for a $400m bond transaction, according to Fitch, which assigned a BB minus rating, at a 5-10 year maturity. The issuer was raising funds to refinance existing debt and for general corporate purposes. Citi and JPMorgan were managing the BB minus/BB minus transaction. After six cross-border transactions pricing last week, no new issuers have stepped out on the road to refill the pipeline. Coca-Cola Femsa, among the group marketing last week, finished a roadshow Thursday without any indication of a deal.