Flash Fixed Income Report /

Colombia's Termocandelaria: Expect strong demand

    Rafael Elias
    Rafael Elias

    Director, Latin America Credit

    Tellimer Research
    7 January 2020
    Published byTellimer Research

    In line with the fast and furious primary activity this week, Colombia's largest non-hydro electricity generator, Termocandelaria Power Limited (TERMOC), is on the road marketing a tap of its outstanding US$410mn 7.875% senior unsecured bonds due 2029 (BB/BB+), which trade at cUS$111.453 (ALLQ) to yield c4.52% (g-spread 297bps; z-spread 259bps).

    The bonds currently trade at around their 52-week high, but have always been regarded as high quality – as seen by their 52-week low of US$102.949 back on 28 January 2019.

    We believe there will be strong demand for the bonds and that they will likely price with little or no concession, particularly given our view that Colombia is likely to be one of the safer markets in the region this year.