Peru's Banco de Credito del Peru (BCP) is expected to come to the bond market with USD and PEN deals. The bank's roadshow will take place on on 29 August-5 September. No details have been given regarding size, tenor or initial price guidance. However, these issues coincide with BCP's tender offer for its outstanding US$800mn 5.375% bonds due 2020 (Baa1/BBB+/BBB+), which trade at cUS$103.544 (ALLQ) to yield c1.90% (to worst) for a g-spread of 18bps and a z-spread of 14bps.
Given the size of the tender, we would expect the new dollar issue to be cUS$1bn, to have an intermediate maturity of c10 years and price at 3.0-3.5% (assuming the new bond is senior unsecured and not subordinated). It would take as a reference the bank's outstanding US$720mn 6.125% subordinated bond due 2027 (Baa3/BBB/BBB), which trades at cUS$108.213 (ALLQ) to yield 2.87% (to call) for a g-spread of 140bps and a z-spread of 141bps.
In Mexico, BBVA Bancomer S.A. Institucion de Banca Multiple (BBVASM) has said investor meetings will run from 29 August-4 September for a potential 144A/RegS USD-denominated, Basel III-compliant subordinated preferred Tier 2 capital bond, expected to be rated Baa3/NR/BB+ (the bank itself is rated A3/BBB+/BBB+). The proceeds are expected to be used to retire outstanding Basel II subordinated bonds and to strengthen the bank's capital ratio.
For pricing comparison, BBVASM's US$1bn 5.125% subordinated bonds due 2033 trade at cUS$97.058 (ALLQ) to yield 5.57% (to call) for a g-spread of 408bps and an i-spread of 419bps. Its US$200mn 5.35% subordinated bonds due 2029 trade at cUS$100.396 (ALLQ) to yield 5.26% (to call) for a g-spread of 385bps and an i-spread of 392bps. And its US$1bn 7.25% junior subordinated 7.25% bonds trade at cUS$103.084 (ALLQ) to yield c2.33% (to worst) for a g-spread of 50bps and a z-spread of 39bps.
Given the above, and assuming a 10-year US$1bn subordinated deal, we would expect the new bonds to price at 4.75-5.0%.
We do not expect concessions on either of the two deals.