The City of Buenos Aires’ US$890mn bond is part of the City’s US$2.29bn medium-term note (MTN) programme.
The City’s government had authorisation to issue a US$500mn bond, but was able to upsize to US$890mn because of a spare US$390mn from a liability management transaction that did not close the previous year.
Roadshows were conducted for the public offering across Europe and the US and consisted of 1-on-1 investor meetings.
The B3/B-/B rated (Moody’s, S&P Global Ratings, Fitch) deal comprised a cash tender of up to US$390mn of the City’s 9.95% Series 11 notes due in 2017, which achieved a participation rate of 57.77%, amounting to US$237mn.
Following the roadshows, the orderbook began gaining traction. Demand for the bond reached 3x the total amount of the transaction at near US$2.6bn.
Initial price thoughts (IPTs) were in the high 7% area, but strong demand enabled the bookrunners to tighten the pricing achieve a final price guidance in the 7.750% area +/-12.5bp.
The deal finally priced on May 24 2016 at 7.625%, and was issued on 01 June 2016, set to mature on the same day in 2027.
By geography, 73% of the bond was distributed across the US, 22% across Europe, the Middle East and Africa, 3% across the Asia Pacific region and 2% across Latin America.
By type, 56% of the bond went to asset managers, 14% went to private banks, hedge funds bought 24% of the bond whilst other entities purchased the remaining 6%.