Brazil, Abu Dhabi Commercial Bank, Embraer price deals; emerging markets debt finishes weaker

By Paul A. Harris

St. Louis, Oct. 1 - Emerging markets were slightly weaker on the day at the New York close, according to a syndicate banker.

Sovereigns were mixed to slightly lower, the banker said. Corporates were generally weaker.

Mexico was down a little, while Colombia and Peru held in.

At the end of the European session a trader in London said that the market had been stronger throughout the bulk of that session, but came off toward the end due to weakness in U.S. stock prices.

The trader saw reasonable activity in Russian corporates, but added that Turkey had been volatile.

Russia's 7½% global bonds due March 2030 were at 109½ bid, 109¾ offered at the European close, having been a fraction over 110 bid earlier in the session.

However the Russia 2030 ended Thursday ¼ point higher than Wednesday's close.

Abu Dhabi Commercial Bank brings $1 billion

Abu Dhabi Commercial Bank PJSC priced $1 billion of 4¾% five-year senior notes (Aa3/A) at Treasuries plus 262.6 basis points on Thursday.

The spread came on top of price talk.

However when the deal was first being marketed the bonds had been talked in the low 300s, an informed source said Thursday.

The reoffer price was 99.596, resulting in a 4.842% yield to maturity.

Abu Dhabi Commercial Bank, Bank of America Merrill Lynch, Deutsche Bank and Standard Chartered Bank were joint bookrunners for the Rule 144A and Regulation S offering.

Abu Dhabi Commercial Bank is the third largest bank in the United Arab Emirates, with total assets of $39.3 billion as of March 31, 2009. The Abu Dhabi government has a 64.8% stake in the bank through the Abu Dhabi Investment Council, while members of the ruling family hold at least an additional 10%.

Embraer prices tight to talk

Brazil's Empresa Brasileira de Aeronautica SA (Embraer) priced a $500 million issue of 6 3/8% global bonds due Jan. 15, 2020 (Baa3/BBB-) at 99.081 to yield 6½% on Thursday, according to a market source.

The yield printed at the tight end of the 6½% to 6 5/8% price talk.

Deutsche Bank Securities Inc. and Morgan Stanley ran the deal.

Proceeds will be used for general corporate purposes, which may include refinancing the debt of Embraer and its subsidiaries and/or funding working capital needs and capital expenditures.

Embraer is an aircraft manufacturer based in Sao Jose dos Campos, Brazil.

In the aftermarket the bonds were straddling the issue price at 98.80 bid, 99.20 offered.

Brazil adds on

Elsewhere in Thursday's primary market The Federative Republic of Brazil (Baa3/BBB-/BBB-) priced an additional $25 million of 5.625% global bonds due Jan. 7, 2041 on Thursday, bringing the issue size to $1.275 billion.

The tap priced at 97.498 to yield 5.8%.

Barclays Capital Inc. and HSBC Securities (USA) Inc. were the bookrunners, with Banco Itau Europa, SA and BB Securities Ltd. as co-managers.

Announcing terms on the original $1.25 billion that priced Wednesday, Brazil said it reserved the right to add up to $62.5 million more to the issue during Asian market hours on Thursday.

Naftogaz pays coupon

News that troubled Ukrainian energy firm, Naftogaz, met the Sept. 30 maturity of its $500 million of 8 1/8% bonds by making a coupon payment, instead of repaying the principle, failed to kindle a sell off in the paper, according to a London-based trader.

The bonds were at 87 bid, 89 offered at the London close, not much moved on the day, but sharply lower than levels seen a week ago, the trader added.

Bondholders are in negotiations with the company, and expect to be exchanged into 9½% notes due 2014, which will come with an explicit guarantee from the Ukrainian government, the trader said.

The terms of the exchange are now the subject of negotiations between bondholders and the company.

© 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.