Turkey, Pemex, Development Bank of Mongolia price notes; emerging markets debt tightens

By Paul A. Harris

Portland, Ore., Oct. 16 – Riding the tailwinds of rallying global financial markets three on-the-run emerging markets issuers, a sovereign and two quasi-sovereigns, priced deals on Tuesday.

Pemex (Petroleos Mexicanos SAB de CV), Republic of Turkey and Development Bank of Mongolia each hit the market.

And with a good tone to the market, buyers had the reins, a London-based trader said.

Saudi Arabia was 18 basis points tighter during the New York morning, the trader said. South Africa was 5 bps to 7 bps tighter.

Latin America was also tighter on the day, according to a sellside source.

Pemex oversubscribed

In the first Mexican deal since the elections, there, Mexican state oil company Pemex (Baa3/BBB+/BBB+) priced a $2 billion issue of 6½% senior notes due January 2029 at a 335 bps spread to Treasuries.

The long 10-year deal was multiple times oversubscribed and came tight to spread talk in the 340 bps area, sources said.

Initial price talk was in the 365 bps area.

Joint bookrunner HSBC will bill and deliver. HSBC, JPMorgan, Scotia and UBS were also joint bookrunners.

Proceeds will be used to finance the company’s investment program and for working capital, as well as to repurchase or refinance debt,

Turkey prices tight

Turkey priced a $2 billion issue of 7¼% global fixed-rate senior notes due December 2023 (expected ratings Ba3//BB) at 98.917 to yield 7½%.

The yield printed at the tight end of yield talk in the 7 5/8% area. Initial talk was in the 7¾% area.

Deutsche Bank, Goldman Sachs International and SG CIB were the bookrunners.

Mongolia deal oversubscribed

Development Bank of Mongolia priced a $500 million issue of 7¼% five-year notes at 98.972 to yield 7½%.

The yield printed at the tight end of final yield talk in the 7 5/8% area. Earlier guidance was in the 7 7/8% area. The deal was launched into the market early Tuesday with initial guidance in the 8¼% area.

Order books came to $4.1 billion, the source said.

HSBC, JPMorgan and Morgan Stanley were the leads.

The development bank plans to use the proceeds to refinance debt.

© 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.