Morning Commentary: Credito Real notes offering possible Jan. 28 week; funds see inflows

By Rebecca Melvin

New York, Jan. 25 – Mexico’s Credito Real SAB de CV Sofom ER’s proposed offering of new intermediate duration notes is still in the offing but has been postponed slightly as the use of proceeds has changed, a syndicate source said on Friday.

Credito Real’s planned tender for up to $313 million of its $625 million outstanding of 7¼% senior notes due 2023 has been canceled, so that is coming out of the use of proceeds. But once new documentation is drawn up with adjusted use of proceeds, the deal is expected to proceed, the source said.

“We won’t be pricing today, but possibly next week,” the source said.

Credito Real, a consumer finance provider, selected Barclays, Citigroup, Goldman Sachs and Morgan Stanley as joint bookrunners of the planned Rule 144A and Regulation S deal. The banks had arranged a series of fixed-income investor meetings, which concluded this week.

In secondary market dealings, pricing is still strong as has been the trend for much of the past two weeks, and emerging markets debt has seen a rise in flows especially to funds with hard-currency emerging markets mandates.

For the week ending Jan. 23, the hard-currency emerging-markets bond funds tracked by EPFR Global, posted “their biggest inflow since the third week of July 2016, when yield hunger and concerns about political trends in Europe saw all EM bond emerging markets bond funds set new inflow records twice in less than a month,” EPFR reported in its weekly note, the EPFR Global Navigator.

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