Mexico's Tenedora Nemak, Tunisia's African Development Bank print bonds; EM spreads widen

By Christine Van Dusen

Atlanta, Feb. 21 - Mexico's Tenedora Nemak SA de CV and Tunisia's African Development Bank (ADB) sold notes on Thursday as spreads widened amid risk aversion spurred by concerns about the Federal Reserve's bond-buying program and a crackdown on speculation in China's real estate industry.

The Markit iTraxx SovX index spread moved out 3 basis points on Thursday to 175 bps over Treasuries. The corporate index widened 6 bps to 228 bps over Treasuries.

Still, emerging markets assets had a "fairly active day," a London-based trader said. "Middle Eastern and North African markets are again holding firm.

Some buyers were seen for Dubai Holdings, and demand was noted for International Petroleum Investment Co.

"Sellers on Abu Dhabi National Energy Co. (TAQA), but the Street still feels like it's covering shorts on this credit," he said. "There's been some good takeout on TAQA recently."

The 2041s were 7 bps wider on Thursday while the 2036s moved out 5 bps.

"Dubai's 2043s were 7 bps wider," he said. "Not quite the natural regional bids on the long end."

Bahrain's 2020s and 2022s finished the session unchanged.

"I'm a bit wary of how other markets are trading here," the London trader said. "But commodities are heavy and the Russian sovereign and corporate space was heavy. Once again, if the Middle East and North Africa keep holding and performing we may be prone to some international selling and rotation."

Ukraine's 2017s have strengthened in trading this week, said Svitlana Rusakova of Dragon Capital, moving above 109 on the bid side.

The 2022s have also traded up, most recently at 102.

"Oschadbank got lifted at 99 and was quoted about a 1/2-point higher at 98½ bid, 99½ offered," she said.

Tenedora prices notes

Mexico-based Tenedora Nemak priced a $300 million issue of 5½% notes due 2023 at par to yield 5½%, a market source said.

The notes were talked at a yield in the 5¾% area.

Citigroup, Credit Suisse and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay bank indebtedness and for general corporate purposes.

Tenedora Nemak is a Garcia, Mexico-based producer of aluminum engine blocks, cylinder heads and transmission components. It is controlled by Alfa SAB de CV.

ADB does deal

Also on Thursday, Tunisia's ADB priced a $250 million add-on to its 7/8% notes due 2018 at 99.347 to yield mid-swaps plus 1 bp, a market source said.

BNP Paribas and Deutsche Bank were the bookrunners for the deal.

ADB is a regional development lender.

ADIB sees buyers

In trading, Abu Dhabi Islamic Bank (ADIB)'s recent $1 billion issue of 6 3/8% perpetual Islamic bonds that priced at par was quoted Thursday at 104 bid, 104½ offered and saw some buyers.

On Wednesday the notes were seen at 104 bid, 104.40 offered.

The sukuk came to the market at par via Abu Dhabi Islamic Bank, HSBC, Morgan Stanley, National Bank of Abu Dhabi and Standard Chartered Bank in a Regulation S-only deal.

"Active again in ADIB perps, closing out 103.80 bid, 104.10 offered," a trader said. "Asian accounts, generally quieter on this one, have been fair sellers in the past few weeks. Regional banks are better buyers, and the Street in the past 48 hours has turned into a much better seller."

Kipco notes get nibbles

Kuwait's Kipco saw its 2016 notes trade at 117 3/8 bid, 118 1/8 offered after the company projected a 19% fourth-quarter rise in net income.

"Decent fourth-quarter results from Kipco," a trader said. "Saw some more nibbling on both the 2016s and 2020s."

And the issue of 4½% notes due 2025 that Dubai's Emirates Airline recently priced at 99.941 traded early Thursday at par bid, 100¼ offered before moving to 99.95 bid, 100.20 offered.

The notes were priced to yield mid-swaps plus 300 bps via Citigroup, Standard Chartered, Deutsche Bank, JPMorgan, Emirates NBD and Morgan Stanley in a Rule 144A and Regulation S deal.

Ferrexpo in focus

One market source was focusing on the recently canceled issue of dollar notes due in five years from Ukraine-based iron ore company Ferrexpo plc via bookrunners Morgan Stanley and Credit Suisse in a Rule 144A and Regulation S deal.

The company shelved its plans due to the widening in credit spreads, as well as its currently liquidity position and other sources of financing.

"A potential extension of the existing bond was under consideration to take advantage of the window in the market for Ukrainian credit issuance," a London-based analyst said. "We consider the decision to not issue as prudent at this stage."

Ferrexpo has a comfortable liquidity position, she said, and maintains solid credit metrics.

"We continue to be constructive on the credit and although a new bond issue would have helped to extend debt maturity profile and reduce exposure to secured debt, we still believe the group has a comfortable liquidity cushion," she said.

In trading on Thursday, Ferrexpo's outstanding bonds "remained stable" at 100¼ bid, 101¼ offered, Rusakova said.

Privatbank deal ahead

Also on the market's mind was Ukraine-based lender Privatbank's planned issue of five-year dollar-denominated notes.

The company has talked the deal in the 10 7/8% area. Credit Suisse, JPMorgan and UBS are the bookrunners for the Rule 144A and Regulation S deal.

The talk is "quite aggressive, considering that Privatbank's 2015s have recently traded around 96," Rusakova said.

Kexim sells bonds

This followed the Wednesday pricing of Export-Import Bank of Korea's (Kexim) $500 million issue of 1¾% notes due 2018 at 99.672, according to a company filing.

BofA Merrill Lynch, SEB Enskilda and Pierce, Fenner & Smith were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used to extend loans to support projects that promote the transition to low-carbon and climate-resilient growth.

Other details on the pricing were not immediately available on Thursday.

© 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.