Mabe, State Bank of India, Lumena price as primary stays hot, Petrobras structures offering

By Christine Van Dusen and Paul A. Harris

Atlanta, Oct. 21 - Emerging markets saw another busy day of new issues on Wednesday, with deals pricing and more issuers getting ready to set terms.

At the same time, exchanges for bonds from distressed issuers were catching traders' attention.

Among the day's new deals, Controladora Mabe, SA de CV priced $350 million, State Bank of India brought $750 million and Lumena Resources Corp. sold $250 million, taking the day's total to $1.35 billion.

Leading deals moving towards pricing, Petrobras International Finance Co. disclosed the structure of its planned benchmark-sized offering of dollar denominated senior unsecured notes (Baa1/BBB-/BBB-), saying it will come in 10- and 30-year tranches.

Brazil's TAM SA set talk at the 9.75% area for its planned 10-year bond issue.

Looking further ahead, Russia's OAO Lukoil (Baa2/BBB-/BBB-) mandated Barclays Capital, ING and Royal Bank of Scotland as bookrunners for a dollar-denominated, Rule 144A and Regulation S bond offering.

And Dubai-based airline Emirates will start a roadshow on Thursday in Hong Kong for a $289 million offering of bonds, according to a source

Controladora Mabe matches talk

Controladora Mabe priced its $350 million issue of 7.875% global bonds due Oct. 28, 2019 at par to yield 7.875% (/BBB-/BBB-), according to a market source.

The deal, upsized from $300 million, came in line with talk at the 7.875% area.

proceeds will be used to repay outstanding debt.

HSBC and Bank of America Merrill Lynch are the lead managers for the Rule 144A and Regulation S offering.

Controladora Mabe is a manufacturer and distributor of white line products, based in Col. de Valle, Mexico.

State Bank of India sells $750 million

State Bank of India priced $750 million of 4.5% global bonds (expected Baa2/BBB-) at mid-swaps plus 190 bps, according to a market source.

The bookrunners for the Regulation S deal are Barclays Capital, Citigroup, HSBC, JP Morgan and UBS.

The issuer is a state-run Indian bank.

Lumena on top of talk

Lumena Resources priced its $250 million issue of 12% five-year bonds (B1/BB-) at 99.087 to yield 12¼%, according to a market source.

Previous price talk was set at the 12¼% area.

After freeing to trade, the new bonds were quoted slightly higher, trading at 99 1/8 bid, 99 3/8 offered in the secondary.

BOC International, Credit Suisse and Deutsche Bank Securities are the joint bookrunners for the Rule 144A Regulation S issue of global senior notes.

Proceeds will be used to repay an approximately $123 million loan from BOC, fund capital expenditures and for general corporate purposes.

The order book was two-times oversubscribed, according to a market source.

About 45% of the accounts that played were U.S.-based, 30% in Europe and 25% in Asia. Asset managers accounted for 71%, retail investors 11% and banks 15%. The balance was taken down primarily by insurance funds.

Lumena is a miner, processor and manufacturer of thenardite products based in Chengdu, China.

Petrobras structures benchmark

Petrobras International Finance announced the structure of its benchmark-sized offering of dollar denominated senior unsecured notes (Baa1/BBB-/BBB-).

The deal will come as tranches of bonds due 2019 and 2039, according to a market source.

Marketing is under way. The roadshow concludes Thursday in New York and Boston, and the deal is expected to price this week.

Citigroup, HSBC, JP Morgan and Santander are the joint bookrunners for the Securities and Exchange Commission registered deal.

Proceeds will be used to repay borrowings under lines of credit used to finance capital expenditures. Any remaining funds will go to general corporate purposes.

Petrobras is an energy company based in Rio de Janeiro, Brazil.

Lukoil mandates bookrunners

From Russia, Lukoil (Baa2/BBB-/BBB-) mandated Barclays Capital, ING and Royal Bank of Scotland as bookrunners for a dollar-denominated Rule 144A and Regulation S bond offering, according to a market source.

The transaction will be launched subject to market conditions and preceded by a roadshow from Oct. 26-Oct. 28 in Europe and the United States.

Lukoil is a Moscow-based oil and energy company.

TAM talks bonds at 9.75%

Brazilian airline TAM is on a roadshow for its 10-year bond issue with price talk set at 9.75% area, according to a trader and a bond fund manager familiar with the deal.

The bookrunners are Citibank and Banco Santander.

The roadshow hit London on Monday, New York on Tuesday and Boston on Wednesday, the bond fund manager said.

The first whispers about the deal were at about 8.5% to 9%.

"Then, with the roadshow, the rumor was a bit increased, to 9.25% 9.5%," the trader said.

"Now they're talking 9.5% to 9.75%, yield-wise. That means there's not much appetite for an airline out of an emerging market country. People are averse to this kind of risk, even with long maturity."

TAM, an airline company based in Sao Paulo, leases its fleet, "so if it goes bust, there's nothing precious within the company," the trader said.

Emirates plans $289 million issue

Dubai's Emirates Airline will start a roadshow on Thursday in Hong Kong for its $289 million offering of bonds, according to a source close to the deal.

The bookrunner is BNP Paribas.

Proceeds would be used to buy two Boeing aircraft.

Astana attempts to reduce debt

Elsewhere in emerging markets, distressed exchanges were drawing interest.

JSC Astana Finance has offered investors "several options" as part of a proposed bond restructuring designed to reduce the Kazakhstan company's debt burden, a trader said.

As previously reported, Astana suspended principal and interest payments on its domestic and international obligations due to continued deterioration of its liquidity. The company then entered into a memorandum of understanding with its creditors committee that sets the terms to be offered to creditors in the proposed restructuring.

One option, according to the trader, would allow "bondholders with 100 bonds to get out with 20% cash payments and finish their exposure. Other options have a bigger haircut and a quite short-term new bond."

Astana Finance is a financial institution based in Astana, Kazakhstan.

Renaissance Securities draws attention

Also attracting investor attention is Renaissance Securities Trading Ltd.'s new issue of $225 million 12% notes due April 2011, priced at 96.099 to yield 15%. The issue was offered as part of a distressed exchange, as a substitute for an issue of $250 million 8¾% notes that were set to mature in November.

"A few months ago, nobody wanted to get into the new issue," a trader said.

"But at the moment it's looking good. It's trading at 97, 98 - slightly above the issue price. So more investors are moving into the new bond."

© 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.