Paraguay sells notes; investors watch Argentina, Gaza, Russia, Ukraine; Mriya defaults

By Christine Van Dusen

Atlanta, Aug. 4 – Paraguay printed notes on Monday as the market remained focused on Gaza – where a brief truce ended – on the recent default in Argentina and on the talks between Russia and Ukraine.

“With Argentina’s default, new sanctions against Russia and troubles surrounding Banco Espiranto Santo we are beginning to see risk-off in some areas of [emerging markets] while the global sentiment slowly deteriorates,” according to a report Erste Group.

Also on Monday, investors were eyeing Ukraine-based Mriya Agro Holdings, which defaulted on some debt, according to a report from Eavex Capital.

“The company said its financial condition has been deteriorating in recent months because of depressed prices for grains, a spike in prices for inputs and problems with raising working capital,” the report said.

The company will conduct a review of its businesses and hire financial advisors to revise the business plan and restructure the balance sheet, Eavex said.

In response, Mriya’s 2018 eurobonds have lost as much as 20 percentage points.

“The company is basically admitting that, in light of its liquidity problems, it is seeking to restructure its debt load,” the report said. “The recent precedent of default on some debt obligations by the group significantly increases the risk of default on the interest payment on its euro bonds in late October.”

The news is proving negative for other agricultural companies in Ukraine, including Ukraine-focused UkrLandFarming plc.

Meanwhile, the local debt market in Russia suffered as a result of recent sanctions from the United States and European Union, according to a report from UFS Investment Co.

Bonds from Hungary continued to weaken, the Erste report said, while local-currency notes from Romania traded higher in yield.

Paraguay prices bonds

In its new deal, Paraguay sold $1 billion 6.1% notes due in 2044 (Ba2/BB/BB-) at par to yield 6.1%, a market source said.

The notes were initially talked at a yield in the 6 3/8% area.

BofA Merrill Lynch and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to finance infrastructure and energy projects and to support the economy.

CAF to issue notes

Venezuela’s Corporacion Andina de Fomento (CAF) is looking to issue dollar-denominated notes due in three years, a market source said.

BofA Merrill Lynch, Deutsche Bank and HSBC are the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes, including funding of lending operations, according to a company filing.

CAF is a lender based in Caracas, Venezuela.

Final book for Jingrui

China-based property developer Jingrui Holdings Ltd.’s $150 million issue of 13 5/8% notes due 2019 drew an order book of more than $200 million from more than 20 investors, a market source said.

The notes came to the market at 98.683 to yield 14%.

Haitong International Securities Co. Ltd., UBS AG, BOCI Asia Ltd., CLSA Ltd. and Guotai Junan Securities (Hong Kong) Ltd. were the joint bookrunners and joint lead managers for the Regulation S offering.

Proceeds from the notes will be used to refinance existing debt and to fund new and existing property projects.

© 2015 Prospect News.
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