Emirates NBD sells notes; RioPrevidencia plans bonds; Brazilian corporates dominate flows

By Christine Van Dusen

Atlanta, Nov. 12 – Dubai’s Emirates NBD sold notes on a slightly weaker Wednesday for many emerging markets assets, with spreads widening for Latin American names.

Dominating the limited flows on Wednesday morning were bonds from Brazil-based Petroleo Brasileiro (Petrobras) – which announced that its oil production from Brazil reached an all-time high in October – and Colombia’s Ecopetrol SA.

Both companies saw their bond spreads move wider on the short and long ends of the curve, a New York-based trader said.

Chile’s Masisa SA saw its notes hold at a 104-mid handle, he said, with very little activity.

Bonds from Mexico-based Cemex SAB de CV moved down, even after signing agreements with Switzerland-based competitor Holcim.

“But seeing good support at the lower levels,” he said.

Some Brazilian high-grade names were able to hold on to recent gains but others – like Odebrecht SA – lagged, he said.

And Brazil-based telecommunications company Oi SA’s bonds improved on the news that it had rejected a takeover offer for a Portuguese company in which Oi has an ownership stake.

Oi’s bonds moved up ½ point to 5/8 point, he said.

In other trading from Latin America, the recent issue of notes from Peru-based cement and concrete company Union Andina de Cementos SAA (Unacem) – $625 million 5 7/8% notes due 2021 that priced at par – moved up on Wednesday morning, a trader said.

The notes were quoted at 102¼, he said.

BBVA, Deutsche Bank and Scotiabank were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for financing an acquisition, to refinance existing indebtedness and for general corporate purposes.

Sellers for Lat-Am

Into the close on Wednesday, real-money accounts were selling many Latin American corporate bonds, a trader said.

“We seemed well-supported through most of the day, considering the selling bias from accounts, but we’ve just started to weaken, led by spread credit widening,” he said.

Petrobras’ bonds were among those to widen, moving out as much as 9 basis points, he said.

The Cemex curve also pulled back, he said, with no selling seen.

Middle East in focus

Looking to the Middle East, trading was active, a London-based trader said.

Bonds from Bahrain inched wider, with the long-dated 2044s trading at just 102 5/8 even in the face of a solid U.S. Treasury market, he said.

“Perpetuals are still ticking along, as are the high-yielders,” he said.

Damac climbs

Dubai-based Damac Real Estate Development Ltd.’s 4.97% notes due 2019 that priced at par traded Wednesday at 96 3/8, up more than two points from the previous session, the London trader said.

This came against the backdrop of a decline in revenue for Dubai hotels, which have reduced room rates as supply has flooded the market. Damac recently opened a new hotel and residence building in downtown Dubai.

Barclays, Citigroup and Deutsche Bank were the joint global coordinators. The three banks – along with Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital and National Bank of Abu Dhabi – were also joint lead managers for the Regulation S deal.

DIFC dips

The recent issue of 4 3/8% notes due 2024 that Dubai’s DIFC Investments LLC priced at par traded just below reoffer on Wednesday, a trader said.

The notes came to the market at mid-swaps plus 185 bps via Dubai Islamic Bank, Emirates NBD Capital, Noor Bank and Standard Chartered in a Regulation S sukuk.

“And Kuwaiti names feel solid,” he said. “Closing at 100¼ bid, Kuwait Projects Co. is solid.”

News reports show that Kuwait’s government has awarded more than $20 billion in contracts so far this year, twice as much as in 2013, while taking steps to improve the country’s business climate.

Ukraine notes weaken

So far this week, sovereign bonds from Ukraine have weakened and activity has been sluggish, said Svitlana Rusakova of Dragon Capital.

The sovereign curve has moved about a half-point lower as Russian military vehicles reportedly moved into Ukraine.

“The quasi-sovereign space was also weaker and inactive,” she said.

The State Export-Import Bank of Ukraine (Ukreximbank) managed to see some demand for its 2015s, however.

“Lifted at 86½,” she said.

Emirates NBD prices bonds

In its new deal, Dubai’s Emirates NBD priced $1 billion 3¼% notes due Nov. 19, 2019 at 99.963, a market source said.

BofA Merrill Lynch, BNP Paribas, Emirates NBD, HSBC and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Emirates NBD is a provider of corporate, consumer, treasury and investment banking and asset management services.

“The initial price guidance yesterday was a very generous 165 bps over,” the London-based trader said. “The bond printed at 150 bps and is now bid at 142 bps over. Given where some of the peer group trade, I think this one is fine.”

Some of the company’s 4 5/8% 2017s “have come out on the back of the deal, but even this one trades wider than most seniors at five years,” he said.

RioPrevidencia plans issuance

Brazil’s RioPrevidencia is looking to issue dollar-denominated notes due in January of 2027, a market source said.

Following a series of investor calls, the notes will be issued by special-purpose vehicle Rio Oil Finance Trust.

The company is the public pension fund for Rio de Janeiro.

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