Chile’s state-owned copper miner Codelco and the Brazilian conglomerate Cosan became the latest Latin American companies to tap the international bond market this month, raising a total of $2.6 billion in back-to-back deals on Tuesday, sources told LatinFinance.
Codelco raised $2 billion after issuing $1.5 billion worth of new 12-year bonds and adding $500 million to its 6.3% 2053 notes, according to the sources.
The company priced the new 6.44% 2036s at 99.942 to yield 6.447%, or 230 basis points over the 10-year US-Treasury bonds. It opened the initial price talk earlier in the day at around 265 basis points and set guidance at around 235, plus or minus five basis points, before launching the deal, a source familiar with the deal said.
The tap was priced at 94.305 to yield 6.746%, equal to a spread of 235 basis points, after the opened at around 265 basis points, the source added.
Bank of America, Citi, J.P. Morgan and Santander were joint bookrunners on the Rule 144A/Reg S bond sale, according to the source.
Moody’s Investors Service assigned the notes a Baa1 rating, based on probable support from the Chilean government in the case of default.
The miner plans to use the proceeds for covering general corporate purposes, including financing investments, according to Moody’s, adding that the funds will help support its investment plans.
Codelco “needs to further invest in the so-called structural projects to recover production and bring volumes back to historical production levels, which requires annual capital expenditures of around $3.5 billion, $4 billion,” Moody’s said in a report.
Codelco sold $700 million worth of 2053s in a two-part sale in September last year.
$600 MILLION FOR COSAN
Meanwhile, Cosan raised $600 million in the sale of seven-year bonds after investors placed as much as $2.1 billion in orders, according to market sources.
The sugar and energy conglomerate priced the 7.25% 2031 notes at 99.304 to yield 7.375% after opening the deal at around 7.75% and tightening it to 7.5%, plus or minus 12.5 basis points, said a source involved in the deal.
Itaú BBA and Morgan Stanley were the global coordinators, with Bradesco, BTG Pactual, Santander and UBS pitching in as the joint bookrunners on the Rule 144A/Reg S deal.
Cosan began calling investors last week, looking to sell up to $750 million in 2031 notes. The company plans to use the proceeds for general corporate purposes, including for refinancing existing debt, according to an investor presentation seen at the time.
Fitch assigned the notes a BB rating, while Moody’s gave them a Ba2.