Maestro Bonds Surge After Chile’s Falabella Buys Peru Retailer

Bonds of Maestro Peru SA jumped the most on record after the Peruvian home-improvement store operator was sold to higher-rated Chilean retailer SACI Falabella.

Maestro’s $200 million of bonds due in 2019 jumped 7.1 cents to 102.24 cents on the dollar at 1:29 p.m. in New York, the highest level since June 2013. The increase was the biggest since the securities were issued in September 2012.

Falabella said in a filing today with Chile’s securities regulator that its Sodimac Peru SA unit acquired 100 percent of Maestro’s shares for 1.4 billion soles ($490 million) in a deal to be funded through international bank loans. Maestro has a grade of B from Fitch Ratings, six levels lower than Falabella’s BBB.

“Falabella is a better credit than Maestro as a standalone,” Juan Pablo Noziglia, head trader at AFP Integra SA, said by phone from Lima. The takeover makes Falabella “the big boy on the block,” with more than 75 percent of Peru’s home-improvement market.

Bonds of Maestro had returned 1.6 percent since Aug. 18, when local newspaper El Comercio reported that private equity firm Enfoca Inversiones was seeking a buyer for the company. High-yield emerging-market bonds have lost an average of 0.6 percent during the same period, data compiled by Bloomberg show.

Falabella’s shares in Santiago rose 2.1 percent to 4,422.60 pesos today, their biggest increase in almost three weeks. As part of the deal, Falabella Peru SAA will seek approval from shareholders to sell $420 million in new shares.

Before it's here, it's on the Bloomberg Terminal.