B2/B-/B rated Gol on Monday announced initial price thoughts of 7.25% for a $100m reopening of its $500m 7% January 2025s, which it sold in November.
The company brought guidance in to 7.125% plus or minus an eighth, but opted to keep the order book open during Asian trading hours, according to a US investor who had placed an order. US investors will be given a chance to look at the final pricing, with the deal due to be launched in the morning New York time, he said.
“I’ve no doubt that this will end up at 7%,” said the investor. “Even there the pricing would be OK for us, given that the bonds were trading above par before they announced the tap.”
Gol’s senior secured 2025s were trading with a “high 6% handle” on Monday morning, said one trader. They were initially reoffered at 98.604 to yield 7.25% in November.
Though unusual for a Latin American issuer to keep books open for the sake of Asian investors, DCM bankers said that accounts from Asia are becoming ever more attracted to Lat Am dollar issues.
“It makes a lot of sense,” said another US-based EM investor. “Your typical Asian credits trade a lot tighter than Lat Am, so if you’re worried about rates rising there’s a lot more to lose over there.
“Lat Am valuations overall are more attractive, we think.”
November’s deal from Gol was its first new issue in three years and came just 18 months after the company carried out a distressed debt restructuring. But a recovery in Brazil’s economy and currency has improved the issuer’s prospects, and the proof of bond market access led rating agencies to lift its rating from Caa3/CCC+/B before the deal.
Earlier in January, Gol completed a tender offer for $21.3m of old bonds due 2020.