Chase Offers Bonds from Banco de Galicia of Argentina
The first international bond issue in recent years for a private-sector bank in Latin America, Banco de Galicia y Buenos Aires, was launched on Thursday by Chase Manhattan Bank in London.
The Argentine bank's $75 million of 10% notes, due in 1994, were priced at 96.99 for a yield to maturity of 11.75%. This equals a spread of 615 basis points over short-term U.S. Treasury notes.
Previous Bonds Guaranteed
A Chase spokesman said the Eurobond issue was designed to tap the growing overseas demand for high-yield securities offered by Latin American issuers.
Issues by banks in the region were hitherto confined to state-owned institutions, such as Mexico's Nacional Financiera and Banamex, in offerings that carried official government guarantees.
"Argentina's private banks are well respected, and we think there will be demand for this issue in Europe and the Far East," a Chase spokesman said.
Bond analysts said the issue should also be attractive to Latin American investors that hold "flight money" overseas. Their holdings are estimated at $300 million in the U.S. alone.
Investors Have Anonymity
As a Eurobond, the Banco de Galicia's securities are in bearer form, and thus the identity of the investor remains anonymous.
The Buenos Aires bank, founded in 1905, is the second-largest private commercial bank in Argentina, with $604 million in assets at midyear.
The $75 million proceeds will fund the bank's short- and medium-term corporate lending.