Banco de Credito del Peru is due this week to issue a $280 million, two-tranche deal backed by diversified payment rights, signaling a break in a protracted lull of structured finance activity from the South American country. The deal is split between a $250 million A piece and a $30 million B piece. The former, backed by an Ambac wrap, has a seven-year final maturity and four-year average life. The unwrapped B tranche has a 5.5-year final maturity and 3.5-year average life. Moody's Investors Service and Standard & Poor's rated the deal Baa2' and BBB', respectively. Price guidance is between 21 and 25 basis points over one-month Libor for the wrapped tranche, according to a source close to the deal. There was no guidance for the unwrapped piece.
Standard Chartered is sole lead on the deal and Dewey Ballantine issuer counsel, while Mayer, Brown, Rowe & Maw is advising the arranger. The Peruvian bank is looking for a favorable asset-to-liability match with this issue, said a source close to the deal. The lion's share of proceeds will go to fund mortgage origination, which has been growing briskly this year. The bank's mortgages are denominated in dollars, in line with the denomination of the upcoming bond. Another $73 million in proceeds will be used to pay down the entire volume of outstanding paper from the same DPR program, according to a source familiar with the deal.