Arendal sets talk; Ras al Khaimah firmly bid; Fibria sees some action; roadshows ahead

By Christine Van Dusen

Atlanta, May 9 - Mexico's Arendal S de RL de CV set guidance for an upcoming issue of notes on Friday during a firm yet slow session for emerging markets assets.

The day also saw three Chinese corporates advance deals: Logan Property Holdings Co. Ltd. mandated bookrunners, and Guotai Junan International Holdings Ltd. and China's Shenzhen Overseas Chinese Town Co. Ltd. set roadshows.

"As we move into another weekend of uncertainty in Ukraine, with a possible further round of European Union and United States sanctions on Russia to follow, EM assets continue to trade on the basis that the tail risk remains in place but is 'known,'" according to a report from Commerzbank.

So there should be some more room for recovery for higher-yielding bonds, the report said.

Bonds from Hungary have been outperforming their peers, particularly on the spread pick-up, the report said.

In other trading, Ras al Khaimah was firmly bid up at 103½ at the end of the week after Standard & Poor's revised the emirate's outlook to negative.

On Friday the 3.297% bonds were bid at 103½ after pricing at par to yield mid-swaps plus 175 basis points via Al Hilal Bank, Citigroup, Mashreqbank, National Bank of Abu Dhabi and Standard Chartered Bank in a Regulation S-registered deal.

The only Latin American bond that was trading on Friday with much volume was the recent issue of notes from Brazil-based Fibria Overseas Finance Ltd., a New York-based trader said.

"A lack of headlines is adding to the overall complacency," he said. "Client flows have lightened from a good pace the past four days and have been mixed most of the week."

Brazilian corporates in focus

Fibria's 5¼% notes due 2024 that priced at 99.302 to yield 5.341%, or Treasuries plus 275 bps, were up a half-point from reoffer on Friday, the New York-based trader said.

Citigroup, Credit Agricole CIB, Deutsche Bank, Goldman Sachs and Banco Votorantim were the bookrunners for the Securities and Exchange Commission-registered deal.

Bonds from Brazil-based Petrobras were mostly unchanged in terms of spreads, he said.

Masisa sees light volumes

The issue of 9½% notes due in 2019 that Chile's Masisa SA recently sold at par saw light volumes on Friday, the New York trader said.

"Continues to be driven by retail, but the chase looks to have abated," he said. "The bonds are trading up against a wall at 105 after opening the week at 1011/4."

Deutsche Bank, Itau BBA, JPMorgan and Scotiabank were the bookrunners for the Rule 144A and Regulation S deal.

In other trading from Latin America, Braskem SA's 2024s continued to tighten and outperform, the New York trader said.

"Peru banks are making new highs again, as there is so little inventory to be had," he said.

Arendal gives guidance

Mexico-based construction company Arendal set guidance in the mid-10% area for its upcoming issue of dollar-denominated notes due in two years, a market source said.

Espirito Santo Investment Bank is the bookrunner for the deal, which is expected to price next week.

And Brazil is looking to issue $1 billion of 30-year notes this month.

Logan picks banks

China-based real estate company Logan Property has mandated Citigroup, Deutsche Bank, HSBC, Goldman Sachs, JPMorgan, Citic Securities, VTB Capital, ABC International and ICBC International as bookrunners for a roadshow starting May 12, a market source said.

And China-based investment holding company Guotai Junan will set out on May 12 for a roadshow to market a dollar-denominated issue of notes, a market source said.

Bank of China, Guotai Junan Securities, HSBC, Agricultural Bank of China, Bank SinoPac, Mizuho Securities, Standard Chartered Bank and Wing Lung Bank are leading the Regulation S marketing trip.

Roadshow for Shenzhen Overseas

China's Shenzhen Overseas, through issuer Sure Best Management Ltd., will embark on a roadshow for a renminbi-denominated issue of notes on May 12, a market source said.

ICBC (Asia), UBS, DBS Bank and CCB International are the bookrunners for the Regulation S deal.

The issuer is a tourism, properties and commodities company based in Shenzhen.

Power Construction gets orders

About 99% of the orders for Power Construction Corp. of China's new 1.5 billion 4.2% notes due May 15, 2017 came from Asia, a market source said.

The remaining 1% of the orders came from Europe.

Banks accounted for 50%, fund managers 43% and private banks 7%.

The notes priced at par to yield 4.2%, following talk between 4.2% and 4¼%, via Standard Chartered Bank, Bank of Communications (Hong Kong branch) and HSBC in a Regulation S deal.

The proceeds will be used for the financing of existing and new overseas investment projects, for working capital and for general corporate purposes.

Chinese bank oversubscribed

The final book for Agricultural Bank of China Ltd.'s new RMB 1.2 billion 3¼% notes due May 16, 2016 was RMB 2 billion from 36 accounts, a market source said.

The notes priced at par to yield 3¼% with Deutsche Bank in a Regulation S deal.

About 72% of the orders came from Asia and 28% from Europe, with 55% from banks, 29% from central banks and public institutions, 8% from fund managers and 8% from retail.

The proceeds will be used for working capital and general corporate purposes.

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