Tower Bersama, Shimao do deals; oil, Greece news push spreads tighter; Petrobras undulates

By Christine Van Dusen

Atlanta, Feb. 3 – Indonesia’s PT Tower Bersama Group and China’s Shimao Property Holdings Ltd. sold notes on Tuesday as spreads tightened for emerging markets assets, helped by rising oil prices, a small sell-off in Treasuries and increased optimism about Greece.

Investors felt better about Greece on Tuesday after a proposal from the finance minister showed the country could swap debt for growth-linked bonds and that the country could maintain a budget surplus of 1% to 1½% of gross domestic product, a London-based analyst said.

“News of progress related to Greece’s debt should support sentiment,” he said.

Russian credit default swaps spreads and sovereign bonds opened on Tuesday about 10 basis points tighter on Monday’s better oil prices, he said.

“Corporates are also opening up better,” he said.

Meanwhile, bonds from Brazil-based Petroleo Brasileiro SA went on a rollercoaster ride on Tuesday as the chief executive stepped down and Fitch Ratings downgraded the energy company’s local-currency issuer default ratings from BBB to BBB-, a New York-based trader said.

After tightening on Tuesday morning, the headline pushed spreads wider. The short end was the most “precarious” and “jittery,” he said.

Eventually Petrobras’ bonds closed 30 bps tighter. Brazil’s Vale SA saw its bonds tighten in sympathy, moving in about 20 bps, he said.

In deal-related news, China’s Xiwang Special Steel Co. Ltd. and Indonesia’s PT Solusi Tunas Pratama Tbk set roadshows. And market sources were whispering about a possible issue of $1 billion 10-year notes from Turkey’s Yapi ve Kredi Bankasi AS and taps of Yacimentos Petroliferos Fiscales’ (YPF) 8 7/8% 2018 bonds and 8¾% 2024 bonds.

Turkey, Middle East narrow

Turkey’s credit default swaps spreads also tightened on Tuesday morning, but just by 1 bp, following the release of inflation data and word that the central bank could cut rates.

“Political pressure shows no signs of ending,” the analyst said.

From the Middle East, bonds were slightly tighter in the morning, with long-dated notes from Bahrain continuing to perform, he said.

By the end of the day, long-dated bonds from the Middle East were firm and higher, a London-based trader said.

Middle East in focus

Bonds from Kuwait were mixed, with Kuwait Energy and Burgan Bank perpetuals unchanged and heavy while Burgan’s 2020s and Kuwait Projects Co. were well supported, the London trader said.

“Lebanon was active with balanced flows,” he said. “Spreads are still 30 bps to 55 bps wider over the month.”

DPWorld’s notes closed 13 bps tighter while the long end for Qatar narrowed by 6 bps, he said.

“U.S. Treasury lower, dealers chasing inventory and stocks and oil and risk sentiment doing well led to a busy and active day,” he said.

Asian names tighten

Bonds from Asia started Tuesday’s session mostly unchanged, a trader said.

“The oil rally continued, post-London open, setting a positive tone, and we closed the day unchanged to 3 bps tighter,” he said.

The recent issues of 2020 and 2025 notes from China-based Huarong Asset Management Co. Ltd. started out as underperformers on Tuesday but bounced back, he said.

“China oil corporates were a touch tighter,” he said. “In sovereigns we started the day unchanged across both curves but closed a ¼ point lower in the Philippines and a ½ point lower in Indonesia as Treasuries dipped.”

Indonesia’s 2045 touched highs of 106½, then moved down to 105 5/8 before closing at 105 5/8 bid, 105 7/8 offered after pricing in January at 98.867.

Meanwhile, India’s Icici Bank Ltd. saw its 2020s trade up and close about 10 bps tighter, he said.

Lat-Am firms

Overall, corporate bonds from Latin America were firmer on Tuesday with steady but not heavy buying from account bases, a New York-based trader said.

Bonds from Brazil-based Odebrecht SA caught a small bid but were mostly quiet while other high-grade names from Brazil fared well, he said.

And Chile’s Cencosud SA saw trading pick up ahead of its possible deal.

Kaisa Group struggles

Chinese property companies finished the day 1/8 point to 3/8 point higher, a trader said, even as China-based Kaisa Group struggled.

The company’s chief executive resigned and Sunac China Holdings agreed to purchase some assets, a move that the market interpreted as negative and “a sign that the likelihood of outright acquisition is diminishing,” according to a report from Schildershoven Finance BV.

“Kaisa 2017 fell sharply on the news and now yields around 30%,” the report said.

Tower Bersama sells notes

In its new deal, Jakarta-based telecommunications tower company Tower Bersama sold $350 million 5¼% notes due Feb. 10, 2022 at par to yield 5¼%, a market source said.

The notes priced at the tight end of talk, set at 5¼% to 5 3/8%.

UBS, ANZ, BofA Merrill Lynch, Citigroup, Credit Agricole CIB, BNP Paribas, DBS, CIMB, HSBC, Mitsubishi UFG, OCBC, SMBC Nikko and UOB were the bookrunners for the Regulation S deal.

The proceeds will be used to refinance outstanding indebtedness.

Shimao Property prices notes

Also on Tuesday, Hong Kong real estate developer Shimao Property sold $800 million 8 3/8% notes due Feb. 10, 2022 at par to yield 8 3/8%, a market source said.

The notes were talked at a yield in the 8½% area.

HSBC, Standard Chartered Bank, Goldman Sachs and UBS were the joint global coordinators with HSBC, Standard Chartered Bank, Goldman Sachs, UBS, J.P. Morgan, Morgan Stanley, CLSA Ltd. acting as joint bookrunners and joint lead managers, according to a filing with the Singapore Exchange.

The proceeds will be used to refinance the group’s existing indebtedness, including the redemption of the 11% senior notes due 2018, and for other general corporate purposes to enhance its liquidity position.

Reliance launches bonds

India’s Reliance Industries launched $750 million notes due in 2045 at Treasuries plus 262.5 bps, a market source said.

The notes were talked at a spread in the 265 bps area.

Barclays, BofA Merrill Lynch, Citigroup and HSBC are the bookrunners for the Rule 144A and Regulation S deal.

Reliance Industries is a Mumbai-based petrochemical and retail conglomerate.

“Deal looks expensive,” a trader said. “But with the market expecting lower yields to come, performance will be driven by real-money participation.”

Roadshow for Xiwang

China’s Xiwang Special Steel will set out on Wednesday for a roadshow to market a dollar-denominated issue of senior notes, a market source said.

UBS AG, Hong Kong Branch, is the global coordinator with UBS, Australia and New Zealand Banking Group Ltd. and CLSA Ltd. as joint lead managers and bookrunners for the Regulation S deal.

The roadshow will be held in Hong Kong and Singapore.

The proceeds will be used to refinance existing debt and for general corporate purposes.

Based in Binzhou, China, the issuer is a special steel manufacturer.

Investor calls for Tencent

China’s Tencent Holdings Ltd. on Tuesday conducted conference calls will investors as part of a plan to issue dollar-denominated notes, a market source said.

Deutsche Bank, Barclays and Goldman Sachs are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Tencent is an investment holding company based in Shenzhen, China.

Solusi sets roadshow

Indonesia’s Solusi Tunas Pratama has mandated BNP Paribas, ING, JPMorgan, Standard Chartered Bank and HSBC as bookrunners for a dollar-denominated issue of notes that will be marketed during a roadshow, a market source said.

The Regulation S marketing trip will begin on Wednesday.

The issuer is a Jakarta-based owner and operator of telecommunications towers for wireless operators.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.