By Miluska Berrospi
NEW YORK, Jan 16 (IFR) - Ecuador is marketing a dual-tranche offering among international investors, the first crossborder social bond to come from a Latin American sovereign, say sources.
Sole lead Goldman Sachs is showing accounts US$326.8m of Class B zero coupon notes due 2035 and a US$230.9m of Class A notes that carry a 2.6% coupon and benefit from a guarantee from regional development bank, the IDB, according to a prospectus seen by IFR.
The Class B notes are expected to come at a discount of around mid 60s and be priced with a yield of 12.25%, while the Class A notes are expected to be taken by Goldman Sachs, said one investor.
With an average life of around 4.5 years, the Class B tranche is coming about 275bp over the sovereign's curve, where the Ecuador's 2024s have been trading at around 9.537%, said the investor.
"It is an asset that is expected to be less liquid but you are replicating Ecuador at a significant pickup," he said.
Proceeds will ultimately be used to finance the construction of social housing.
(Reporting By Miluska Berrospi and Paul Kilby; Editing by David Bell)
((paulj.kilby@thomsonreuters.com; 646 223 4733; Reuters Messaging: paulj.kilby.thomsonreuters.com@reuters.net))
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