Empresa Eléctra Guacolda’s 10-year note defied the odds, having been pulled from the private placement market the year before over structural and sector concerns. Then, three weeks before launch, the company was placed on watch for downgrade to junk by Moody’s.
CSFB was able to reverse the ratings move and achieved an investment grade with a stable outlook for the issue. The deal was relaunched as a 144A transaction, broadening distribution to emerging market investors and high-grade investors. Despite tough market conditions for energy sector project finance, ongoing issues with AES Corporation, a 50% shareholder in Guacolda, and Latin American risk concerns, the issue attracted high-quality demand.
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