Uruguay leads charge to global market

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Last month’s lull in dollar-bond sales by Latin American issuers gave way to intense activity on Tuesday as three corporates and a sovereign raised a combined $3.45 billion while companies from across the region scrambled to line up debt sales as the market reopened.

The Republic of Uruguay priced $1.25 billion worth of 35-year bonds, while Brazilian state-owned oil company Petrobras, Banco de Crédito del Perú (BCP) and BBVA México also raised funds, a source familiar with the deal told LatinFinance.

Uruguay priced the 5.25% 2060 notes at 99.318 to yield 5.293%, or 115 basis points over US Treasury bonds. It opened the initial price talk in the 145 basis points area and set guidance at around 120, plus or minus five basis points, before launching the deal, the source said.

HSBC, Itaú BBA and Santander were joint bookrunners on the offering, the source added.

Pablo Goldberg, emerging markets head of research and portfolio manager at Blackrock, said that the IPTs were attractive for Uruguay’s and reflected its scarcity premium. The new bond extends the sovereign’s bond curve by another five years, he said, adding that investors placed as much as $4 billion in orders for the new notes.

“The long tenor of the bond is likely to be driving demand from buyers that like owning long duration assets as the Fed cutting cycle approaches,” Goldberg said. “In addition to the new issue, Uruguay is also conducting a one day tender and exchange, further reducing its refinancing risks.

The Uruguayan government commenced an offer on Tuesday to repurchase a portion of notes maturing between 2025 and 2031, the government said in a press release.

CORPORATE ACTION

In the corporate segment, meanwhile, Petrobras lead the dealmaking with the sale of $1 billion in 6% 2034 notes. It priced the bonds at 98.128 to yield 6.25% after opening the deal earlier in the day at around 6.5%. Demand from investors peaked at $3.1 billion before closing at $2.8 billion, according to the source.

Bank of America, Bradesco BBI, HSBC, JPMorgan Mizuho and Morgan Stanley were joint bookrunners on the offering, the source added. Fitch and S&P Global assigned the notes BB ratings.

At the same time, Petrobras said it is offering to buy back six series of global notes maturing between 2030 and 2051. The offer expires September 9, it said in a press release.

Latin American banks were also in the market, with Peru’s BCP and the Mexican branch of Spain’s BBVA each raising $600 million.

BCP priced 2035 subordinated Tier 2 notes at a fixed yield of 5.875% after opening the deal earlier in the day at around 6.1%, according to the source. Demand for the notes was as high as $1.1 billion. Bank of America, Goldman Sachs and JPMorgan were the bookrunners.

BBVA México, for its part, priced the 2029 notes at par to yield 5.303%, equal to a spread of 165 basis points over USTs. It opened the deal in the 205 basis points area and set guidance at around 170, plus or minus five basis points, the source said.

The lender was initially looking to issue $500 million worth of notes, but upsized the deal by $100 million, according to the source. BBVA, Barclays, Bank of America and JPMorgan were the bookrunners.

Corporates from elsewhere in the region, including Chile’s Banco Bci, Colombia’s TermoCandelaria and Argentina’s Edenor, are also expected to hit up the international market in the coming days.

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