Sappi Papier prints bonds as risk appetite improves; Latin American issuers advance deals

By Christine Van Dusen

Atlanta, April 5 - Sappi Papier Holding GmbH sold notes as other issuers - including Argentina's Banco de Galicia y Buenos Aires and Brazil's Banco Votorantim SA and Companhia de Electricidade do Estado da Bahia - planned deals on a Tuesday that saw spreads tightening, risk appetite improving and buying activity continuing.

"Overall, spreads are doing well," a trader said.

Indeed, the JPMorgan Emerging Markets Bond Index Plus spread started the European session at Treasuries plus 254 basis points, about 4 bps tighter from the start of the week and 9 bps tighter since the previous week.

"Debt spreads continue to tighten, albeit in a gradual manor," according to a report from RBC Capital Markets.

Liquidity improved on Tuesday, said Nick Chamie, head of emerging markets research for RBC.

Sappi Papier Holding - the European subsidiary of a Johannesburg-based producer of coated fine paper - sold a two-tranche issue of euro- and dollar-denominated notes due 2018 and 2021 at par to yield 6 5/8%, a market source said.

The deal included $350 million notes due April 15, 2021, which priced at a spread of Treasuries plus 319 bps. The notes are non-callable for five years.

In the second tranche, Sappi sold €250 million notes due April 15, 2018 at a spread of 358 bps over Bunds. The notes are non-callable for four years and include an equity clawback for up to 35% at 106.625.

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