EM LATAM CREDIT: New Issue: Banco De Credito del Peru SA (BCP; Baa3 /BBB- /BBB)
“NEW $ DEAL: BANCO DE CREDITO DEL PERU BMARK 10YNC5 SUB, HIGH 6%” – BBG
IPTs: High 6%
FV: 6.25% Area
• Peru’s largest bank BCP and a subsidiary of holding company Credicorp proposed issuing a USD benchmark size Tier 2 subordinated 10.25NC5 with an expected rating of Baa2/BB+.
• Limited supply out of Peru in general and the strong fundamentals of BCP should generate good demand and shouldn’t require much new issue concession.
• BCP 10NC5 year subordinated debt (Baa3/BB+/-) issued Sept. 2024 at T+224 bps, now quoted T+216bps or 6.15%, has trended tighter since issuance but 20 bps wider MTD.
• Banco Internacional del Peru (BINTPE; Baa1neg/BBB-/BBB), subordinated debt ratings: (BINTPE; Baa3/BB+/BB+) issued a similarly structured tier 2 issue in late January 2025 at T+207bps, last quoted T+205bps or a yield of 6.01%.
• S&P rated the proposed notes two days ago. The proposed notes are not considered loss-absorbing and won’t get much equity treatment as there is no contingent capital clause requiring a conversion or write down in the case of a severe credit event nor are principal and interest payments deferrable, according to the rating agency.
• BCP 4Q2024 earnings were supportive with a reported ROE of 20.1%.
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