Brazil’s Suzano holds off on pricing notes this week: market source

By Rebecca Melvin

New York, Sept. 6 – Suzano Papel e Celulose SA has decided to hold off on pricing its planned U.S. dollar-denominated benchmark offering of senior unsecured notes this week and will look at pricing the deal next week instead, a New York-based market source said on Thursday.

“What we’ve heard is that it’s not happening today,” a New York-based market source said. The issuer was going to continue monitoring market conditions and may try to price next week.

The Brazil-based pulp and paper company wrapped up three days of fixed-income investor meetings on Wednesday, and some had hoped that the investment-grade credit would reopen the Latin America primary market.

The primary has been shuttered for months due to adverse market conditions as fragile EM currencies of governments saddled with high levels of dollar-denominated debt slide in the face of the strengthening U.S. dollar and higher interest rates.

The issuer, which was said to be considering tranches maturing 2030 and/or 2049, was dissatisfied with pricing action this past week and is in no rush to issue, the market source said.

Nevertheless, given the dearth of new paper and the credit worthiness of the company, the deal is expected to perform well once it does price, the source said.

S&P Global Ratings and Fitch Ratings are expected to assign BBB- ratings to the Rule 144A and Regulation S notes.

Proceeds – seen at upwards of $2 billion – will be used to fund the company’s merger with Fibria Celulose SA.

BNP Paribas, JPMorgan, Mizuho, Rabobank and others were selected to arrange roadshow meetings that were held in the United Kingdom and the United States.

The issuing entity will be Suzano Austria GmbH, which is guaranteed by Suzano Papel e Celulose.

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