HALISTER1: Latam Airlines 2024 Bonds Offer Attractive Carry: BTG Pactual

Latam Airlines 2024 Bonds Offer Attractive Carry: BTG Pactual

(Bloomberg) -- BTG maintains positive view on Latam Airlines bonds, with LATAIR 24s offering attractive carry trading at 436 bps z-spread, according to note from analysts Josefina Valdivia and Thomas Tenyi.
  • 2020s look tighter, trading 84bps inside the spread of retailer SMU’s 2020s and 107 bps inside that of oil co. Geopark
  • NOTE: SMU and Geopark are junk bond issuers also based in Chile
  • Latam is looking for refinancing opportunities to reduce interest expense and could consider calling TAM21 bonds in short term
  • Latam could generate $730m in FCF in 2017, net leverage could reach below 4x by end 2018
  • Latam should benefit from increased exposure to Brazil as demand should recover along with GDP growth
To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net Christiana Sciaudone

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
BBTG11 BZ (BTG Pactual Group)
LTM CI (Latam Airlines Group SA)

People
Josefina Valdivia (Banco BTG Pactual SA)
Thomas Tenyi (BTG Pactual US Capital LLC)

Topics
First Word Credit US

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