Faced with sparse alternatives, Argentine investors flocked to Megabono II, the latest consumer deal from Compania Inversora Bursatil and Banco de Valores, which closed Oct. 30. The stampede squeezed the yield on the senior piece to 7.9% from the coupon of 10.75%, the tightest pricing achieved by this pair of underwriters in the seven transactions they have jointly led in the asset class so far this year. The rate compressed sharply from Megabono I, closed June 25.
"There are two things going on. Rates have fallen drastically and there's better overall confidence," said Sergio Capdevila, head of trust services at Banco de Valores, which doubles as trustee on the transaction. Tanking rates are largely a function of the lack of paper for domestic investors.