Suzano Papel e Celulose taps banks; September pipeline building, pending market conditions

By Paul A. Harris

Portland, Ore., Aug. 29 – There have lately been sellers of Brazilian and Argentine bonds, according to a market source who added that apart from those names there have been no conspicuous moves in the Latin America space as summer draws toward its conclusion in the bond market.

Among Brazilian corporates the Light Servicos de Eletricidade SA/Light Energia SA 7¼% notes due May 2023 were 94½ bid, 95¾ offered on Wednesday, unchanged, according to an investor.

A week ago they were 95¼ bid, 96½ offered, the source added.

The $600 million issue priced at 99.485 in late April.

Elsewhere, in the face of a massive military buildup on the Syria-Turkey border taking place as the government of Syria said it intends to clear rebel forces holding the northwestern Syrian capital Idlib, the Turkish lira and Turkish sovereign bonds continue to sell off, a market source said.

However shorter maturity euro- and lira-denominated debt are holding in much better than longer duration dollar-denominated paper, the source noted, remarking that Turkish debt appears oversold and should have room to run, if and when the situation in the border area appears to stabilize.

Suzano Austria mandates banks

Amid light news flow in new issues, Suzano Papel e Celulose SA mandated BNP Paribas, JPMorgan, Mizuho and Rabobank to arrange meetings with fixed-income investors in the United Kingdom and the United States early in the Sept. 3 week.

A benchmark sized dollar-denominated Rule 144A and Regulation S offering of senior unsecured notes maturing in 2030 and/or 2049 may follow.

Investor meetings are scheduled to begin Monday and wrap up Wednesday.

S&P Global Ratings is expected to assign its BBB- rating to the deal.

Fitch Ratings, which is expected to assign its BBB- rating to the new dollar-denominated notes, says that the proceeds will be used to fund the merger with Fibria Celulose SA and expects the overall notes offer to be as high as $2 billion.

The issuing entity will be Suzano Austria GmbH, and the guarantor will be Suzano Papel e Celulose, a pulp and paper company based in Salvador, Brazil.

Early fall primary market activity may be in the offing, a syndicate banker said.

There are some names surfacing, but issuing new bonds will be tricky given emerging markets sentiment, the source added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.