As a first-time issuer in the cross-border bond market, Peru LNG drew keen attention from global investors when it issued a high-yield bond last March. At $940 million, priced at 5.375%, it was the largest private sector bond ever issued from Peru.
The securities featured a 9.25-year average life with 12 semi-annual amortizing payments starting in 2024. The company, which operates a natural gas liquefaction plant, used the proceeds to refinance the outstanding debt it drew upon to build the plant. Its success reflected a number of factors. For starters, investors appreciated the company’s recent investment grade ratings from Moody’s, S&P and Fitch.
The company was also coming to market when there was a lack of supply from Peru. Peru LNG would be only the second Peruvian company to come to market in 2018. Peru LNG also conducted a road show in the US, Latin America and Europe, meeting 92 key investors through one-on-one meetings, events and conference calls. In the end, the order book neared $2.5 billion from 115 investors, an oversubscription rate of 2.6 times.
Initial price talk had been set at the mid-5.000%. Investor appetite allowed Peru LNG to reduce the pricing by 12.5 bps through execution.
Atlantic Investors Service 