As we reported on 29 August, Peru's Banco de Credito del Peru (BCP) was expected to come to the bond market with USD and Peruvian sol (PEN) deals.
These issues were set to coincide with BCP's tender offer for its outstanding US$800mn 5.375% bonds due 2020 (Baa1/BBB+/BBB+), which trade at cUS$103.451 (ALLQ) to yield c1.88% (to worst) for a g-spread of 10bps and a z-spread of 3bps.
At the time, we said that, given the size of the tender, we would expect the new dollar issue to amount to cUS$1bn, to have an intermediate maturity of c10 years and to price at 3.0-3.5%.
On 6 September, BCP issued its US$700mn (upsized from US$500mn) U.S. dollar bond due 2025 at a re-offer price of US$99.913 to yield 2.718% or T + 130bps. This bond was issued to refinance its outstanding 5.375% bonds due 2020 (and for general corporate purposes).
Information made public today indicates the bank will now issue its PEN bond: a five-year benchmark bond, with expected ratings of NR/BBB+/BBB+ (issuer ratings Baa1/BBB+/BBB+), due 17 September 2024.
In this case, and since the issue is set to be in PEN, the proceeds are expected to be used to refinance BCP's PEN2.0bn 4.850% notes due 2020 (Baa1/BBB+/BBB+), which trade at cPEN101.583 to yield c3.37%, for a g-spread of 117bps and an i-spread of -1.4bps.
The payment of the issue price of the notes will be made in U.S. dollars based on an exchange rate of PEN3.3426 per US$1.00.
Initial price guidance is in the 4.9% area, which we believe is attractive given 1) the bank's high credit quality and 2) the likelihood that the bonds will be senior unsecured.