Mexico's Bancomer does deal; EM rally takes a break; Russia, Turkey, Lat-Am debt widen

By Christine Van Dusen

Atlanta, April 3 - Mexico's BBVA Bancomer SA sold notes on Thursday as the recent rally for emerging markets bonds took a breather ahead of Friday's release of economic data from the United States.

"EM is opening softer this morning," a London-based analyst said.

Volumes were lower than on Wednesday, she said, with bonds from Turkey widening about 7 basis points. Paper from Russia was between 3 bps and 5 bps wider, while Central and emerging European notes moved out as much as 4 bps.

"Today's market performance contrasts with the strong global rally in the past few days," according to a report from Barclays. "Risk assets in Europe are broadly flat following a slow session in Asia."

On Friday the United States is expected to release its non-farm payrolls numbers for March that could show growth, market sources said.

Looking to Latin America, activity was lighter for external debt and low-beta credits moved slightly wider on Thursday, a New York-based trader said.

Venezuela and PDVSA outperformed during the session, with the sovereign's 2027s closing at 76 and PDVSA's 2017s at 851/2.

Bonds from Argentina didn't see much action but saw prices rise between 15 cents and 50 cents on Thursday, he said.

Most investors and issuers appeared to be waiting to see Friday's economic data from the U.S. before making any big moves, he said.

In deal-related news on Thursday, Indonesia's Lippo Karawaci Tbk and Oil India Ltd. were on roadshows and Chile's Empresa Nacional de Electricidad SA sought issuance.

Bancomer sells bonds

In its new deal, Mexico-based financial institution Bancomer sold $750 million 4 3/8% notes due 2024 at 98.994 to yield 4.501%, or Treasuries plus 170 bps, a syndicate source said.

The notes priced tighter than initial talk, set in the 185 bps area.

BBVA, Credit Suisse and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Karawaci on roadshow

Indonesia-based developer Lippo Karawaci set out on Thursday for a roadshow to market a dollar-denominated issue of notes, a market source said.

Citigroup, Deutsche Bank, BofA Merrill Lynch and Credit Suisse are the bookrunners for the deal.

The issuer previously postponed the sale of five-year dollar-denominated notes that were talked in the 11% area.

The proceeds were to be used for refinancing of existing debt, to fund the debt service account and for general corporate purposes.

Oil India markets notes

Oil India is on a roadshow for a dollar-denominated issue of benchmark-sized notes, a market source said.

Citigroup, Deutsche Bank, HSBC, RBS and Standard Chartered Bank are leading the marketing trip, which began on Thursday.

A Regulation S deal is expected to follow.

Chilean corporate seeks issue

Chile-based electricity company Empresa Nacional de Electricidad is looking to issue dollar-denominated notes in a Securities and Exchange Commission-registered deal, according to a company filing.

BBVA and JPMorgan are the bookrunners for the notes, which will include a make-whole call.

The proceeds will be used for general corporate purposes.

Market-watchers were also whispering on Thursday about a possible issue of notes from South Korea via bookrunners Barclays, BofA Merrill Lynch, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Korea Development Bank and Samsung Securities.

Slovenia deal oversubscribed

Slovenia's new two-tranche issue of €2 billion notes due 2017 and 2021 drew a combined final book of €9.5 billion, a market source said.

The €1 billion 1¾% notes due in 2017 that priced at mid-swaps plus 115 bps received 37.4% of its orders from Germany, Austria and Switzerland.

Another 15.6% came from Asia, 12.7% from the Nordics, 8.9% from the Americas, 8.2% from Slovenia, 6.6% from Western Europe, 5.9% from the United Kingdom, 3.6% from Benelux nations and 1.1% from others.

Fund managers picked up 51.6%, central banks and official institutions 27.8%, banks 10.6% and insurers and pension funds 10%.

Second tranche draws orders

Slovenia's €1 billion 3% notes due 2021 - priced at 99.478 to yield mid-swaps plus 173 bps - received 25.6% of its orders from the United Kingdom.

Germany, Austria and Switzerland picked up 23.7%, Asia 15.5%, Western Europe 10.6%, Slovenia 7.6%, Benelux nations 5.7%, Nordics 4.5%, Eastern Europe 3.2%, the Americas 2.9% and the Middle East 0.7%.

Fund managers accounted for 58.3%, central banks and official institutions 19.2%, banks 13.9% and insurers and pension funds 8.6%.

Barclays, Commerzbank, HSBC, Societe Generale and Unicredit were the bookrunners for the Regulation S deal.

Shinhan shows final book

Also oversubscribed was South Korea-based Shinhan Bank's new $500 million issue of floating-rate notes due 2017, which priced at par to yield Libor plus 65 bps.

The deal drew $2.7 billion in orders from 116 accounts, with 54% from the United States, 40% from Asia and 6% from Europe.

Asset and fund managers picked up 74%, banks 19%, insurers and others 4% and private banks 3%.

BofA Merrill Lynch, BNP Paribas, Credit Agricole, Citigroup, JPMorgan and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal. Mizuho Securities, Shinhan Asia and Shinhan Investment Corp. were the other leads.

© 2015 Prospect News.
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