Maxima Grupe prices €300 million notes; Suzano holds off on dollar deal to monitor markets

By Rebecca Melvin

New York, Sept. 5 – Maxima Grupe UAB braved the fraught emerging markets debt market on Thursday, pricing a €300 million offering of senior unsecured bonds to yield 3½%.The deal for the Lithuania-based retail chain comes on the heels of a tap on Wednesday for €300 million in dual tranches for its Baltic neighbor, the Republic of Latvia.

But Suzano Papel e Celulose SA is holding off pricing a benchmark-sized offering of dollar-denominated senior unsecured notes, which wrapped up roadshow meetings on Wednesday. The Rule 144A and Regulation S deal is now expected to price next week at the earliest.

The Brazilian pulp and paper company, which is an investment-grade credit, is viewed as a good candidate to reopen the Latin America new issue market, which has been moribund since the middle of July. But the issuer will continue to monitor market conditions this week and possibly price next week.

Issuance for Latin America had been tailing off since April and by July only one deal priced, which was a $500 million offering of 9¼% 2024 notes for Cemig Geracao e Transmissao SA that came on July 12.

“What we’ve heard is that it’s not happening today,” a New York-based market source said of the Suzano offering.

The company was not satisfied with this week’s pricing action and is in no particular rush to issue, the source said. But at the same time the deal, which has been talked at dual series of 2030 and 2049 notes, is expected to perform well once it does price, the source said.

While there is not a hard deadline to get the deal done, it is expected that the company will want to allow some girth around Brazil’s upcoming presidential election on Oct. 6, which is likely to increase volatility around Brazil and the emerging markets overall since Brazil is an important component of the space.

Maxima details

The Maxima deal priced at the tight end of talk for a yield of 3½% to 3¾%, with deal size smaller than the €350 million originally talked.

Joint lead managers and bookrunners of the Regulation S deal are BNP Paribas, Deutsche Bank and SEB.

The notes are expected to settle on Sept. 13, and proceeds are earmarked for refinancing and general corporate purposes.

Vilnius, Lithuania-based Maxima Grupe is a retail chain, operating in Lithuania, Latvia, Estonia, Poland and Bulgaria.

Meanwhile, Latvia priced €350 million of new notes in a re-opening of two tranches, including €150 million of the 2028 notes and €200 million of the 2047 notes on Wednesday, according to a market source.

The €150 million of 1 1/8% notes due 2028 priced at 101.178 for a yield of 0.997%, or mid-swaps plus 14 basis points. The total deal size stands at €500 million, including the original €350 million of 10-year notes that priced in May.

The €200 million add on to its 2¼% notes due 2047 priced at 108.522 to yield 1.861%, or mid-swaps plus 38 bps. The total deal size is €700 million including the original €500 million of 2¼% notes priced in February 2017.

J.P. Morgan Securities plc, Citigroup and Natixis are stabilizing managers for the Regulation S deal.

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