Mexico's Urbi prices new notes as Greece talks spur positive momentum for risky assets

By Christine Van Dusen

Atlanta, Jan. 27 - Mexico's Urbi Desarrollos Urbanos SAB de CV sold notes on a solid Friday for emerging markets assets as Greece reportedly reached "important understandings" with its creditors, reducing the possibility of a messy default.

A statement released Friday by the Institute of International Finance, which represents the talks' private creditors, said that "important understandings were reached on legal and technical issues."

Further talks will take place on Saturday.

"In European trading hours, risky assets are keeping their positive momentum," according to a report from Barclays Capital Markets.

Still, the Markit iTraxx SovX index spread started the day 5 basis points wider.

"But retail investors are still buying cash bonds, so there's less of a retracement there," a London-based trader said.

Bonds from Turkey's banks were among the most active early in the session, with only Finansbank showing any underperformance.

"And Ukraine is busy making life difficult for itself, with the deputy prime minister confirming they won't hike gas tariffs, which is keeping the sovereign curve pegged back," he said. "Still, Ukraine corporates remain very strong, and the City of Kiev is up 6 points this week."

In other trading on Friday, Egypt continued its good run, another trader said.

"And GTB Finance's 2012s mature on Sunday, so that should be mildly supportive for African Export-Import Bank's 2016s, GTB's 2016s and Nigeria's 2021s, although a lot of switching already has been done out of the 2012s," he said. "Gabon and Ghana feel pretty well supported."

Meanwhile, Senegal traded in the low 99s.

South Africa bonds solid

For bonds from South Africa, it was a fairly solid week.

"The main action was in the quasi-sovereigns and the corporates, rather than the sovereign," a trader said. "We saw pockets of demand all week for the new South Africa bonds."

By the end of the European session on Friday, most emerging markets names were solid, another trader said.

"While the buying has abated, there is still no meaningful selling," he said. "Russia risk was still very much the darling of the market, with VTB Bank posting positive results."

Urbi prints notes

In its new deal, Mexico-based homebuilder Urbi Desarrollos Urbanos priced a $500 million issue of 9¾% notes due Feb. 3, 2022 at 98.442 to yield 10%, a market source said.

The notes were talked at the 10¼% area after being previously whispered in the low- to mid-10% area.

Credit Suisse, Citigroup, Santander and BBVA were the bookrunners for the Rule 144A and Regulation S notes.

Proceeds will be used for debt refinancing.

Socar mandates leads

In other deal-related news, the State Oil Company of the Azerbaijan Republic (Socar) mandated Deutsche Bank, Citigroup and RBS for a planned benchmark-sized offering of Regulation S notes, a market source said.

A roadshow will begin Jan. 30 and travel to London before concluding on Feb. 1 in Germany.

The company initially announced plans for a deal in May, but it failed to materialize. That deal was resurrected in November.

"Given how long-awaited this issue has been and the relatively favorable industry environment, we believe that at the right price it will generate very good interest," a London-based analyst said.

Said a trader, "This will attract huge interest, given the lack of liquid assets there."

Minerva, Edesa tap dealers

Brazil-based food processing company Minerva SA has mandated BTG Pactual, Goldman Sachs and Itau BBA for a roadshow in Latin America, the United States, Europe and Asia, a market source said.

The roadshow will begin on Jan. 30 in Santiago, Chile, and Boston and travel to New York City, London, Hong Kong, Singapore and Los Angeles before concluding on Feb. 3.

And Argentina-based power company Empresa Distribuidora de Electricidad de Salta SA (Edesa) has mandated Itau BBA and Standard Bank for a roadshow from Feb. 2 to Feb. 8, a market source said.

The roadshow will begin in Buenos Aires and travel to Santiago, Chile; Geneva; Zurich; and London before wrapping up in New York.

In November the power company announced plans for a $65 million issue of notes.

Volcan sells bonds

This news followed the late-Thursday pricing of Peru-based mining company Volcan Compania Minera SA's $600 million issue of 5 3/8% notes due Feb. 2, 2022.

The notes came to the market at par to yield 5 3/8%, or Treasuries plus 344 bps, via JPMorgan and Morgan Stanley in a Rule 144A and Regulation S deal.

The final book was about $4.5 billion, a market source said.

About 50% of the orders came from the United States, 30% from Europe and 20% from Latin America.

Braskem oversubscribed

The final book for the new $250 million add-on to Brazil-based Braskem Finance Ltd.'s 5¾% notes due 2021 was $2.5 billion, a market source said.

The notes came to the market at par with bookrunners Citigroup, Deutsche Bank and Santander in a Rule 144A and Regulation S deal.

The petrochemical company's original issue totaled $750 million.

© 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.