Morning Commentary: Unigel pulls planned offering of 2025 notes amid ‘soft’ market

By Rebecca Melvin

New York, March 16 – Unigel Participações SA’s cancelation of a dollar benchmark offering of seven-year notes didn’t seem to rattle the Latin America emerging markets too much on Friday.

“It was a tough sell, I think. The market is relatively soft, and this was a single B company that had just come out of a restructuring process,” a New York-based syndicate source, away from the deal, said.

The Brazilian commodity chemical producer’s rating from Fitch Ratings was based on its small business-scale relative to larger and more diversified global petrochemical peers. But its vertically integrated operations in the acrylics and styrenics businesses, some operational flexibility, an established market position in Brazil and a diversified portfolio of customers and end markets, were noted as positives for the company.

The Latin America region has three deals on the calendar this past week.

Brazil’s Itau Unibanco Holding SA priced $750 million of 6½% perpetual tier 1 subordinated notes (expected ratings: B2//B) at par, following price talk that wasn’t moved from the mid 6% area.

And Peru LNG SRL priced $940 million of 12-year notes (expected ratings: Baa3/BBB-/BBB-) at par on Thursday to yield 5 3/8%.

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