Cementos Pacasmayo, rated BB+/BBB-, sold $300 million of 144A registered bonds maturing February 8 2023 through Bank of America Merrill Lynch, BCP (Banco Comercial de Perú) and JP Morgan.
After attracting a book of around $2.5 billion, the bonds were sold at a price of 99.008 with a coupon of 4.5% to give a yield to maturity of 4.625%.
Initial price thoughts had been in the high 4% to 5% range, with official guidance then released at 4.75% plus or minus an eighth.
Pacasmayo will use the proceeds from the bonds to prepay debt and for capex.
Issuers looking to take advantage of the extraordinary demand for LatAm credits — which two bankers said was the strongest they had ever seen — have another reason to hurry, as some expect a slowdown in issuance during February.
“In a week or so issuance will slow down a little, because a lot of companies are still using their September results but investors will soon want to wait for the annual numbers,” said one market participant. In addition, Chile’s annual holiday period is in February, while Carnival could slow the pace in Brazil.
However, many market participants believe that in the medium term the level of demand should remain strong, with debut bond refinancings continuing to feature.
One corporate finance lawyer said he was constantly receiving enquiries from Latin American companies about financing syndicated loans in the capital markets.
“These are conversations that people weren’t having nine months ago,” he said. “But they see a demand, they believe it’s an interesting opportunity, and often prefer international investors to domestic investors because they are open to more price negotiation.”
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