Market turbulence sidelines much of Latin America’s deal calendar, but Empresas CMPC, Unigel on tap

By Rebecca Melvin

New York, May 15 – Several deals that had landed on Latin America’s new issue calendar in recent weeks remain in limbo as market players “await better markets,” according to a New York-based syndicate source.

“Our view is that it will stabilize eventually,” the source said, and deals that were in the works among a half dozen or so Latin America corporate issuers will be able to proceed.

Among deals that are on hold and at risk of not getting done in the near term are Telecom Argentina SA’s planned offering of U.S. dollar-denominated notes, Petroquimica Comodoro Rivadavia SA’s dollar-denominated notes of intermediate duration, Banco Regional SA’s up to $300 million of up to seven-year notes, Banco de La Cuidad de Buenos Aires’ Argentine-peso denominated floating-rate notes and Transportadora de Gas Internacional SA’s dollar 10-year notes, according to market sources.

An issue of dollar, medium-term notes for Peru's Camposol SA was also on the calendar, but the San Isidro-based vegetable and fruit producer canceled a concurrent tender offer for existing notes due 2021, citing conditions, including financing conditions, that were not met, according to a press release.

Another syndicate source said deals like PCR may be able to get done after the next round of disclosure statements. The Buenos Aires-based oil and gas exploration and production company, like others, is in a financial blackout period, and updated disclosures could propel their planned offerings.

Nevertheless, there is a high hurdle to overcome for Argentine issuers in particular as Argentina’s financial and economic outlook remains negative. The Argentine peso is at record lows against the U.S. dollar and its currency troubles and heavy debt load has prompted the sovereign to start talks with the International Monetary Fund regarding a possible backstop against further shocks related to the strengthening dollar.

But two deals for Latin America joined the calendar this week. Santiago, Chile-based pulp and paper company Empresas CMPC SA announced that it plans to price a dollar denominated offering of intermediate notes, and the company was holding roadshow meetings with fixed-income investors through Tuesday.

And Unigel Luxembourg SA came back to the market with a revised offering – half the size and at a higher yield – after scuttling a deal in March. The new deal is for $200 million of 2024 notes that were talked on Tuesday at a yield in the 10% area.

The original Unigel deal was a $400 million offering of seven-year notes that was talked initially at an 8% yield.

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