EM LATAM CREDIT: Colbun: Mandate FI Investor Meetings
(COLBUN; Baa2/BBB/BBB+)
"MANDATE: Colbun SA to Hold FI Investor Calls Starting Thursday" – Bbg
IPTs 10Y: N/A
FV 10Y: T+125bp Area
• Vertically integrated Chile electric utility Colbun mandated investor meetings potentially leading up to a USD benchmark-sized senior unsecured10-year green bond issuance.
• Colbun has 2032 notes yielding 5.01%, or 7Y+107bp, while Chile government-owned Codelco (CDEL; Baa2/BBB+/BBB+) has an interpolated yield of 5.19% for that maturity so 18bp wide to similarly rated Colbun. CDEL 35s were quoted 5.62% which would put a new Colbun 10 year at 5.44%, or T+122bp with the 10-year U.S. Treasury yielding 4.22%, plus a small new issue concession.
• For a Chile electric comp, we see slightly lower rated Engie Energia (ECLCI; NR/BBB/BBB) with 2034s last quoted 5.59%, or 10Y+135bp. Those bonds have been quoted on average 46bp wide to COLBUN 32s, last quoted 58bp apart.
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GLOBAL MACRO: Key Deals Still Outstanding With Two Days to Go
As Trump confirms that the August 1st tariff deadline will not be extended, we make some tweaks to our list of still-outstanding key deals:
- Brazil: Talks with US advancing, Lula studying counter-tariffs, contingencies if 50% tariff installed
- Canada: Negotiations at an "intense phase" as of Monday
- Chile: Expects copper tariff exception, officials in Washington
- China: Trump to make call on extension, "a couple" of details still to work out
- India: Preparing to face higher US tariffs of 20-25% temporarily, US delegation in mid-August. Expects deal by Sept/Oct
- Mexico: Optimistic, aims for tariff agreement this week. Talks today.
- Norway: Tariff talks "still ongoing"
- Singapore: US 'non-committal' on 10% tariff staying, rising or falling
- South Africa: Remains committed to solution, but is working on response plan including tariff desk for exporters
- South Korea: Declines to comment on US demands for investment fund, actively discussing a package, hasn't heard whether deadline would be extended
- UK: Not expecting steel deal during Trump's UK visit
- Global: Baseline RoW tariff will be 15-20%
US: Trump Underscores August 1st Tariff Deadline
U.S. President Trump posts the following to Trump Social: "THE AUGUST FIRST DEADLINE IS THE AUGUST FIRST DEADLINE — IT STANDS STRONG, AND WILL NOT BE EXTENDED. A BIG DAY FOR AMERICA!!!"
EURIBOR OPTIONS: ERZ5 97.87 Puts Lifted
ERZ5 97.87 puts paper paid 1.0 on 18K.
