LatAm region eyes Frontera, Chile deals; Srpska prices €168 million 4¾% five-year notes

By Rebecca Melvin

New York, June 22 – This week’s pricing of Frontera Energy Corp.’s $350 million of 9.7% five-year notes was viewed as positive for the troubled Latin America debt market; but given the deal’s “unique” aspects, it was not seen as a strong indicator that other issuers would be able to price in the current market successfully, a New York-based market source said.

“It’s a good sign because it was a tough deal,” the source said of Frontera, a Colombia-focused explorer and producer of crude oil and natural gas.

“Oil prices are better so that is helping the cause,” the source said.

Given its troubled path, the fact that the market was receptive to it may be positive for other credits in a weaker market, he said.

In addition, Chile is wading into the market with a so-called soft-currency deal that will be on roadshow next week. The sovereign has selected HSBC, Itau and Scotiabank as bookrunners for the proposed offering. The deal is being sold under Rule 144A and Regulation S.

Elsewhere, Republic of Srpska priced 4¾% five-year notes on the smaller end of talked deal size early Friday, with €168 million ultimately pricing compared to a maximum €200 million deal initially talked and not quite reaching the midpoint of the €150 million to €200 million range later discussed.

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