Puerto Rico Agency Doubles Taxable-Note Sale to $1 Billion
February 08, 2012, 9:07 AM ESTBy Michelle Kaske
(Updates with comment from bank official in second paragraph, preliminary marketing in fifth paragraph.)
Jan. 31 (Bloomberg) -- The Government Development Bank for Puerto Rico, the financing agency for the U.S. territory, doubled the amount of taxable notes it’s selling this week to $1 billion amid investor demand.
“We saw very strong investor appetite,” Jose Otero, vice president of financing for the bank, said by telephone from San Juan, the capital. “We particularly saw a lot of interest in the seven-year maturity and we were able to increase the deal size.”
The bank set a preliminary yield of 4.49 percent on $500 million of notes due in February 2019, 200 basis points more than the 2.49 percent yield on benchmark taxable bonds due in seven years, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
The Development Bank, rated Baa1, the eighth-highest grade from Moody’s Investors Service, is also offering $250 million of notes due in 2015 and $250 million due in 2017. JPMorgan Chase & Co. will market the securities.
Puerto Rico officials promoted the notes outside the U.S. before the sale, meeting with investors in South America, Juan Carlos Batlle, president of the bank, said in a telephone interview Jan. 18. Sale documents included information for buyers in Chile, Columbia, Peru, France, Hong Kong and elsewhere.
The sale is the biggest taxable offering since the Port Authority of New York and New Jersey sold $1 billion of taxable bonds Sept. 26, Bloomberg data show.
A spokesman for JPMorgan, Justin Perras, declined to comment.
--Editors: Jerry Hart, Mark Schoifet
To contact the reporter on this story: Michelle Kaske in New York at mkaske@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net
