Codelco prices $1.3 billion notes; Latam Airlines eyes notes; pressure on Maduro mounts

By Rebecca Melvin

New York, Jan. 28 – Corporacion Nacional del Cobre de Chile, or Codelco, priced $1.2 billion of 4 3/8% notes (expected ratings: A3/A+/) at 93.054 on Monday to yield 4.815%, or a yield spread of U.S. Treasuries plus 175 basis points, according to a syndicate source.

The proceeds are expected to be used primarily to finance tender offers for several notes issues.

Citigroup, HSBC, J.P. Morgan and Scotia Capital were bookrunners of the Rule 144A and Regulation S deal.

Codelco is a Santiago, Chile-based copper mining company.

Chile’s Latam Airlines Group SA has mandated banks and scheduled fixed-income investor meetings for a planned offering of dollar-denominated of notes (expected rating: //B+), a market source said on Monday.

Goldman Sachs, J.P. Morgan, BNP Paribas, Credit Suisse, Deutsche Bank and Santander are the bookrunners for the Rule 144A and Regulation S deal.

Roadshow meetings are scheduled through Thursday.

Latam Airlines Group is based in Santiago.

The United States announced new sanctions against PDVSA on Monday, a move that is in addition to existing sanctions against Venezuelan individuals in government that limits PSVSA’s transactions with people in the United States. The sanctions did not go so far as to sanction PDVSA from selling to U.S. refineries.

At the same time, Venezuela’s opposition leader, Juan Guaido, who proclaimed himself president of the country last week, said that he has ordered the Venezuelan congress to put a new board of directors in place over the state-owned oil company. The new board will also preside over Citgo, PDVSA’s U.S. oil refining subsidiary.

The move comes as the ruling president, Nicolas Maduro, who has been in power since 2013, appears to be doubling down on his hold of the government, and he still controls the military and PDVSA. He is calling efforts to make him step down a coup attempt.

A notes offering from Mexico’s Credito Real SAB de CV Sofom ER will be smaller than initially expected after the consumer lender cancelled a tender for its 2023 notes, according to market sources.

Barclays, Citigroup, Goldman Sachs and Morgan Stanley are joint bookrunners of Credito Real’s planned Rule 144A and Regulation S deal, which is now expected to be $300 million to $350 million of intermediate duration notes, not $500 million or more.

Also in Latin America, the bonds of Brazilian mining company Vale SA fell in trade on Monday after a dam breach at Minas Gerais buried mine buildings and an adjoining neighborhood with mud and iron ore waste on Friday. Sixty people were killed in the disaster, and the death toll is expected to rise. Vale is based in Rio de Janeiro.

Vale’s 6Ľ% notes due 2026 dropped 3.5 points to 3.75 points to 103.25 on the Frankfurt exchange. Vale’s American Depositary Receipts were down $2.21, or 16%, to $11.46 in early trading.

Elsewhere, China’s property developers were busy in the primary market. Greentown China Holdings Ltd. priced $400 million of guaranteed senior perpetual capital securities at par on Friday, with a distribution rate of 8 1/8% initially, and Future Land Development Holdings Ltd. issued on Monday $300 million of 6ľ% senior notes due 2022. Greentown China is a Hangzhou, China-based property developer, and Future Land is a Hong Kong-based real estate operator and developer.

Joining the primary calendar were Jingrui Holdings Ltd., with plans to price an international offering of guaranteed dollar-denominated senior fixed-rate notes, and Yuzhou Properties Co. Ltd., with plans to price dollar-denominated senior notes. The property developers are based in Shanghai and Hong Kong, respectively.

Also toll road and property company Road King Infrastructure Ltd. announced a proposed issue of dollar-denominated notes subject to market conditions and investor demand. Road King is based in Hong Kong.

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