CLP Power, Reliance tap market; Pacific Rubiales releases earnings; profit-takers emerge

By Christine Van Dusen

Atlanta, April 27 – China’s CLP Power Hong Kong Financing Ltd. and India’s Reliance Communications Ltd. priced notes on Monday as sellers emerged for recent issues from Asia on the back of the rally in U.S. Treasuries.

Still, most high-grade cash bonds from the region closed their session broadly unchanged, a London-based trader said.

“China oil and gas traded heavy in anticipation for a new Cnooc Ltd. jumbo deal, which we expect to come sometime this week,” he said. “In Korea, we had onshore sellers of five-year bank paper in the morning, which pushed spreads a couple wider. We’ve seen some demand, post-London open, and the market closed unchanged.”

Among high-yield Asian paper, Chinese property bonds closed the Asian session 3/8-point to 5/8-point higher, he said.

“The Philippines sovereign bonds were ¼-point to ½-point higher, with the long end better bid while the Indonesia curve opened ¼-point higher but closed the day unchanged,” he said.

The new notes from China Petroleum & Chemical Corp. (Sinopec Group) – a five-tranche issue of dollar-denominated and euro-denominated notes due in five, 10, 30, three and seven years – received some attention in trading on Monday, a trader said.

The deal included 2½% notes due 2020 that priced at 99.576 to yield Treasuries plus 125 bps, which on Monday traded at 124 bid, 122 offered.

The 3¼% notes due 2025 that priced at 99.022 to yield Treasuries plus 145 bps closed Monday at 146 bps bid, 144 bps offered, he said.

Sinopec’s 4.1% notes due in 30 years that priced at par to yield Treasuries plus 152 bps were unchanged from Friday’s level of 154 bps bid, 151 bps offered.

Pacific Rubiales sees buyers

From Latin America, Toronto-based and Colombia-focused Pacific Rubiales Energy Corp. released its first-quarter 2015 operational update, showing that prices are down but production is up, another trader said.

The results were unsurprising, and, in response, buyers were seeking the company’s 2019 and 2025 bonds on Monday, he said.

Lat-Am in focus

In other trading from Latin America, most of the volumes seen on Monday were focused on bonds from Brazil-based Petroleo Brasiliero SA and Vale SA, a New York-based trader said.

Petrobras’ bonds were about 5 bps tighter on Monday morning while Vale’s notes were about 10 bps tighter as iron ore prices moved back up to those seen in early March, he said.

But the two issuers were unable to hold on to their gains as profit-taking took hold and ended the day 5 bps to 10 bps wider than Friday’s close.

High-grade paper from Brazil was quiet but better bid while Mexico-based Cemex SAB de CV’s bonds were firm and better bid.

Spreads tighten

Looking to the Middle East, spreads tightened on the dip in U.S. Treasuries, a London-based trader said.

“On balance, we saw better buying in this space, although not on massive volumes. Liquidity is tricky, as usual, and with one eye on summer and Ramadan in a few months, I can’t see it improving,” he said. “Perpetuals ticked a little higher.”

The new issue of notes from Dubai’s Noor Bank PJSC – 2.788% notes due 2020 at par to yield 2.788%, or mid-swaps plus 130 bps – traded just below par on Monday, he said.

Standard Chartered Bank, Al Hilal Bank, Citigroup, Dubai Islamic Bank, Emirates NBD Capital, Qinvest and Sharjah Islamic Bank were the bookrunners for the Regulation S deal.

Demand for bank bonds

Bank paper from the Gulf region remained in demand, especially those bonds with a five-year tenor, the trader said.

“And Saudi Electricity Co. is popular, especially the long end. Spreads are performing by 4 bps to 7 bps there,” he said, noting there was “more two-way in Kuwait Energy’s 2019s, with the bond ticking nicely, along with most high-yield names.”

CLP Power sells notes

In its new deal, China’s CLP Power priced $300 million 3 1/8% 10-year notes at 99.566 to yield Treasuries plus 125 bps, a market source said.

The notes were talked a spread of 125 bps to 130 bps.

ANZ, Credit Agricole CIB, HSBC, Mizuho Financial Group and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The notes are guaranteed by CLP Power Hong Kong Ltd., a Hong Kong-based electric company.

Reliance taps market

India’s Reliance Communications printed a $300 million issue of notes due in 2021 at a yield of 6½%, a market source said.

DBS and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Other details were not immediately available on Monday.

Reliance is a telecommunications company based in Navi Mumbai, India.

Bantrab gives guidance

Guatemala’s Banco de los Trabajadores (Bantrab) set talk in the 10½% area for a $100 million issue of 10-year notes, a market source said.

Deutsche Bank is the bookrunner for the Rule 144A and Regulation S deal.

The notes are expected to price Tuesday or Wednesday.

The lender is based in Guatemala City.

Talk from ACI Airport

Uruguay’s ACI Airport Sudamerica SA set talk in the 7¼% area for a $200 million issue of notes due in 2032, a market source said.

BofA Merrill Lynch and Nomura Securities are the bookrunners for the Rule 144A and Regulation S deal.

ACI is the holding company of Montevideo’s Carrasco International Airport.

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