Chile, Petrobras bring 11-year note deals with no new issue premium; LatAm has ‘big day’

By Rebecca Melvin

New York, Jan. 25 – Latin America’s emerging primary market was active on Thursday. Chile priced €830 million of 1.44% 11-year notes to yield 1.449%, or a yield spread of mid-swaps plus 35 basis points, and Brazil’s Petroleo Brasileiro SA (Petrobras) was pricing $2 billion of 11-year notes to yield 5.95%, which was low compared to initial talk in the low to mid 6% range.

Both of the Securities and Exchange Commission-registered deals priced with no new issue premium, suggesting ongoing strength in Latin American emerging market debt.

“[Petrobras] caught a great wind after yesterday’s news out of Brazil,” a New York-based market source said.

The market source was referring to the loss of a highly-anticipated appeal by Luiz Inacio Lula da Silva to overturn his corruption conviction in the sweeping Car Wash corruption probe.

It was a big day for Latin America’s emerging market debt market, with five deals getting priced on Thursday, a second New York-based market source said.

Brazil’s Natura Cosmeticos SA was pricing $750 million of five-year notes, Argentina’s MSU SA was pricing $600 million of seven-year non-call four bonds, and Agua y Saneamiento Argentinos (AySA) was pricing $500 million of five-year non-call three notes.

Elsewhere, Russian commercial bank Alfa Bank announced plans to issue at least $300 million of notes under Regulation S.

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