Sigma prices, Gilex waits in choppy Lat Am

Mexican food producer Sigma Alimentos was the only Latin American borrower to issue internationally this week as bankers said that issuance conditions remained difficult

  • By Oliver West
  • 23 Mar 2018
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Grupo Alfa-owned Sigma announced initial price thoughts of 225bp over US Treasuries for a new 10 year $500m will-not-grow trade, seeking mainly to refinance existing debt.

Baa3/BBB/BBB rated Sigma, which was last in bond markets with a euro trade in February 2017, received $1.1bn of orders, allowing a small amount of tightening to a launch spread of 212.5bp over.

According to bankers both on and away from the deal, this equated to a new issue premium of 25bp, a concession that would have been exceedingly cheap for a credit of Sigma’s calibre until early February, but that bankers saw as a decent result on a day that the Dow Jones closed 733 points down.

“There are US investment-grade names out there that announced before us and initially attracted huge books but have still not yet priced,” said one banker on 
Sigma’s deal. “Given that, the company should be absolutely thrilled.”

The banker added that he had another EM name ready to issue on Friday but that he had already advised the client to wait until Monday at least.

“This is by no means a bad deal, but just shows you how tough the market is,” said a Lat Am DCM banker away from the deal.

His words were echoed by one head of Lat Am DCM not on the deal.

“Sigma is an excellent name and a very defensive credit,” said the DCM head. “Initial price thoughts were super-cheap and they could barely budget pricing.

“That just tells you how much concession issuers need to be giving in this market.”

The DCM head added, however, that it was probably a wise decision for Sigma to issue, and that investors often did not understand the timing restrictions faced by corporate issuers.

“Issuers have to be thoughtful about markets but they cannot always wait for an amazing bull market,” said the banker. “Sometimes investors ask why x or y issuer is coming now but they don’t realise some corporates need a lot of time to prepare issues.

“These questions will emerge a lot more now markets are weaker.”


Citi, HSBC and JP Morgan led Sigma’s 4.875% 2028s, which were launched at 99.336 to yield 4.96%.


Investors still examining Gilex 

If bond buyers were hardly enthused by Sigma, a credit with strong ownership and a clear benchmark (due 2026) off which to price its new bond, it is hardly surprising that Colombian financial holding company Gilex has not yet announced its deal plans.

B2/BB rated Gilex, the company through which Colombia’s second richest man, Jaime Gilinski, owns the lender GNB Sudameris, wrapped up a roadshow with Deutsche Bank and Goldman Sachs on Wednesday.

But its lack of announcement does not mean it is going back on its bond plans as several other Latin American issuers — including Brazil’s Unigel a week ago — have in recent weeks.

“There are still several accounts doing additional credit work and the company could still be doing follow-up calls on Friday,” said one banker close to the deal. “We have to be a little bit responsible in this market and will take it day by day, but feedback has been constructive.”

Gilex’s proposal is not the easiest of structures: it will be a senior unsecured bond issued at holdco level, which some investors reckon ranks below even additional tier one debt at the opco level.

“There’s a big element of price discovery and it’s an aggressive structure,” said another banker on the deal. “All the more reason to be cautious.” 

There are few obvious comps. A bond issued five years ago by Corp Group, the holding company of Corpbanca, which was later acquired by Itaú, is the only structure of this type that has been seen in Latin America.

Some investors are looking for pick-up versus Itaú’s recent AT1 issuance, while others are looking at GNB’s curve.

“There is no rush,” said the first banker on the deal. “These financials are valid through to May.”

GNB’s senior debt is rated Ba2/BB+. The bank took over HSBC’s Colombian, Peruvian and Paraguayan operations in 2012 and last issued internationally in March 2017 with a $300m subordinated tier two deal.

  • By Oliver West
  • 23 Mar 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 134,174.05 511 7.88%
2 JPMorgan 128,971.84 533 7.57%
3 Bank of America Merrill Lynch 114,226.50 384 6.71%
4 Barclays 99,213.66 356 5.83%
5 Goldman Sachs 97,629.05 275 5.73%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 20,423.32 23 9.47%
2 SG Corporate & Investment Banking 14,215.71 38 6.59%
3 Deutsche Bank 13,118.70 35 6.08%
4 Bank of America Merrill Lynch 12,117.87 27 5.62%
5 Citi 11,366.88 31 5.27%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 5,907.08 27 10.40%
2 JPMorgan 4,381.89 22 7.72%
3 Citi 4,165.68 23 7.34%
4 Deutsche Bank 4,050.74 23 7.13%
5 UBS 2,626.72 9 4.63%