Banco Davivienda SA, Colombia’s third-largest bank, plans to sell 10-year dollar bonds as soon as this week, a person familiar with the transaction said.
The bank may sell the subordinated securities in a benchmark offering, said the person, who asked not to be identified because he isn’t authorized to speak publicly. Credit Suisse Group AG and JPMorgan Chase & Co. are managing the sale, the person said. A benchmark offering is typically at least $500 million.
The Bogota-based bank is taking advantage of falling overseas financing costs to sell bonds for the first time in international markets as investors buy higher-rated emerging-market debt amid concern Europe’s sovereign crisis will derail global growth. The bond issuance comes ahead of Davivienda’s plans to sell American depositary receipts and after it agreed this year to buy HSBC Holdings Plc’s operations in Costa Rica, El Salvador and Honduras for $801 million.
“Its an ideal time to be selling bonds,” said Felipe Campos, the head analyst at Alianza Valores brokerage in Bogota. “There’s a lot of appetite for emerging-market bonds. It also gives investors a chance to get to know Davivienda before it offers ADRs.”
Standard & Poor’s, Moody’s Investors Service and Fitch Ratings all rate Davivienda the lowest level of investment grade. Fitch expects to rate the 10-year bonds BB+, or one level below investment grade, it said in a statement today. Moody’s rated the debt Ba1, also one level below investment grade, according to a separate statement.