Korea Hydro, African Development Bank price amidst weaker tone; GS Caltex bonds widen

By Aleesia Forni

Virginia Beach, Sept. 25 - It was another rocky session for emerging markets bonds on Wednesday.

But despite a day that saw spreads continue to move wider overall, new issues were seen from Korea Hydro & Nuclear Power Co. Ltd. and Tunisia's African Development Bank.

African Development Bank came to market with $1 billion of five-year notes on Wednesday, selling them at mid-swaps plus 6 basis points.

Meanwhile, Korea Hydro sold a $500 million issue of 2 7/8% five-year notes with a spread of Treasuries plus 160 bps.

Also during the session, China's Country Garden Holdings Co. Ltd. launched an offering of senior notes due 2021 at 7¾%.

Details also emerged of the recent $375 million offering from Argentina's Arcos Dorados Holdings Inc. The company announced it had sold the 6 5/8% notes due 2023 at 100.909 in a Rule 144A sale.

Another recently priced deal from GS Caltex Corp. was seen trading wider early Wednesday, a trader said.

The source quoted the notes 8 bps weaker compared to levels seen Tuesday.

"Not much going on, but it's not pretty," the source said of the day's market.

African Development's new issue

The day's largest deal came from African Development Bank, which priced $1 billion of notes due Oct. 2, 2018 on Wednesday at a spread of mid-swaps plus 6 bps, according to a market source.

The notes priced at 99.933 to yield 1.639%.

The issuer is a regional development lender with headquarters in Tunis, Tunisia.

Korea Hydro prices tight

In other primary action, Korea Hydro priced $500 million of 2 7/8% notes (A1/A+/) due 2018 at a spread of Treasuries plus 160 bps, according to an informed source.

The notes priced at the tight end of the Treasuries plus 160 bps to 165 bps talk.

The deal sold at 99.405 to yield 2.892%.

Citigroup, Deutsche Bank, Goldman Sachs and UBS were the joint bookrunners.

Korea Hydro is a Seoul, South Korea-based subsidiary of Korea Electric Power Corp.

Country Garden launches

Meanwhile, Country Garden set guidance for its senior notes offering due 2021 at 7¾% on Wednesday, according to a market source.

Goldman Sachs (Asia) LLC, J.P. Morgan Securities plc, BOCI Asia Ltd., HSBC and ICBC International Capital Ltd. will also be joint bookrunners and lead managers.

Proceeds will be used for general corporate purposes.

Country Garden is a Foshan, China-based real estate developer focused on large-scale residential communities.

Arcos details sale

Arcos Dorados priced $375 million of 6 5/8% notes due 2023 at 100.909 in a Rule 144A offering, according to a company news release.

The notes were issued concurrently with a tender offer, which exchanges the company's outstanding 7½% notes due in 2019 for new notes.

The proceeds from the concurrently issued new notes will be used to pay the principal and premium on the existing 2019 notes in connection with a tender offer, to repay some short-term debt, to unwind the company's cross-currency interest rate swap with Bank of America and for general corporate purposes.

Based in Buenos Aires, Arcos Dorados is the largest operator of McDonald's restaurants in Latin America.

Caltex notes weaker

The secondary market saw GS Caltex's recently priced $400 million of 3¼% five-year notes leak 8 bps wider compared to levels seen Tuesday, a trader said.

The notes were quoted at 195 bps bid.

Caltex sold the notes with a spread of Treasuries plus 190 bps in a Rule 144A and Regulation S deal on Monday.

The deal priced at the tight end of talk.

Pricing was at 99.548 to yield 3.349%.

The notes had been quoted better at 187 bps bid, 185 bps offered on Tuesday.

Bookrunners were BofA Merrill Lynch, Citigroup and Goldman Sachs.

GS Caltex is an oil refiner based in Seoul, South Korea.

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