(UPDATES with book size, launch details)
By Paul Kilby
NEW YORK, Jan 12 (IFR) - Honduras amassed more than US$5bn of orders for its US$700m 2027 bond on Thursday, allowing it to tighten pricing a good 25bp on its first cross-border issue in three years, sources told IFR.
Demand for Latin American sovereigns remains robust as accounts look to put money to work following an issuance drought late last year.
Leads squeezed pricing before launching the deal at a yield of 6.25%, the tight end of guidance of 6.375% (+1/8) and well inside initial price thoughts of mid-to-high 6%.
Both improving fundamentals and the borrower’s decision to stick to the middle of its US$500m-US$850m target size helped generate interest in the deal.
“If you look at countries that have outperformed IMF programs, there are two countries that come to mind: Jamaica and Honduras,” said Sean Newman, a senior portfolio manager at Invesco.
Honduras was last in the international markets in late 2013, when it issued a 2020 to yield 8.75%.
That bond had been trading at a bid yield of around 5.50%, while the borrower’s 7.5% 2024 was being quoted this week at around 6.06%, according to Thomson Reuters data.
Bank of America Merrill Lynch and Citigroup are acting as leads on the new offering, which is expected to price later on Thursday.
The country is rated B2/B+ by Moody’s and S&P, both with positive outlooks. (Reporting by Paul Kilby; Editing by Natalie Harrison and Marc Carnegie)