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Brazil’s largest private sector lender Banco Itaú was unable to tighten pricing from initial price thoughts on its return to bond markets on Monday as investors remain hesitant to add risk in choppy markets.
<div>Just three months after it first issued an additional tier one perpetual, Itaú was back with the same structure. A combination of such a swift return to markets and a softer tone meant that the bank had to offer something a decent concession to its original AT1s, but even <g class="gr_ gr_80 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep" id="80" data-gr-id="80">so</g> the bonds traded flat in the aftermarket. <br><br></div><div>Itaú — rated Ba3/BB/BB after a downgrade from Fitch on the day of its latest deal — announced initial price thoughts of mid 6% area for a new AT1 non-call five perpetual <g class="gr_ gr_71 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar multiReplace" id="71" data-gr-id="71">bond</g>. <br><br></div><div>This was the same level at which the issuer talked the sale of its first AT1 perp in December. On that occasion investors placed $8bn of orders, allowing leads to launch a $1.25bn deal at a yield of 6.125%, but this time around attracted just $1.4bn of orders and sold $750m at 6.5%.<br><br></div><div>“The market was quite clear at where the deal should clear, and we left it at that,” said one banker close to the deal. “Even in US investment-grade markets, you saw names...