LatAm issuers bring $2.34 billion deals; investors eye jobs report; Treasury prices dip

By Rebecca Melvin

New York, Dec. 7 – Emerging market credit continued to see new deals price on Thursday with $2.34 billion in Latin America from three issuers alone. However, further additions to the deal calendar were slim, as what effectively amounts to a primary shutdown around the year-end holidays approaches.

There was on the other hand economic news on the radar promising to influence existing issues.

Investors are poised for the release on Friday of the widely-watched U.S. payrolls report. A solid report was expected by at least one survey, estimating employers added 195,000 jobs for the month and that the unemployment rate held steady at a low 4.1%.

A strong jobs report will mean more pressure on Federal Reserve officials to continue lifting interest rates in 2018. The market has mostly priced in, and the Federal Open Market Committee has said it plans to raise its Fed funds rate next week at its last meeting of 2017.

A Dec. 13 rate increase would make three for the year, and FOMC officials have said they plan three rate increases next year. But next week’s meeting will bring updated forecasts for the economy and interest rate policy going forward.

U.S. Treasuries weakened on Thursday starting around midday, reversing the general trend in yields so far this month. On Thursday yields moved up, quoted at 2.374% at the end of the session, up from 2.330% on Wednesday. A House of Representatives stopgap spending bill, signaling progress on efforts to prevent a U.S. government shutdown, was credited with pulling Treasury prices lower.

The iShares J.P. Morgan USD Emerging Markets Bond ETF slipped 24 cents, or 0.2%, to $115.51. The shares have dipped from a high for the year of $117.26, notched in September.

In Latin America, Yacimientos Petroliferos Fiscales SA priced $1 billion of new notes including a $250 million add-on to its 6.95% notes due 2027 and $750 million of new 30-year notes.

The new 2047 notes priced at par to yield 7%, which was the tight end of guidance for 71/8% area yield, revised down from the mid-7% area.

The 6.95% notes due 2027 priced at 106¼ for a yield of 6.08%, which was at the guided pricing.

YPF is a state-run petroleum and natural gas company based in Buenos Aires.

Another energy company, this one from Mexico, Infraestructura Energetica Nova SAB de CV priced $840 million of notes in 10- and 30-year tranches.

The $540 million of 30-year notes priced with a 4 7/8% coupon at 96.18 to yield 5 1/8%.

The spread was tight compared to talk at 235 bps over Treasuries. Talk was in the high 200 bps area.

The $300 million of 10-year notes priced with a 3¾% coupon at 98.543 to yield 3.926%. Its pricing was a spread of 155 basis points over U.S. Treasuries, compared to talk in the high 100 bps area over Treasuries.

IEnova is Mexican gas distributor.

Also pricing was Banco BTG Pactual’s $500 million of 5½% five-year notes at 99.437 to yield 5 5/8%. Pricing came at the tight end compared to initial talk in the 6% area.

All of the deals would be used to fund tenders of existing debt.

Icici Bank Ltd. of India priced $500 million 3.8% 10-year senior notes through its Dubai branch at 99.728.

The Rule 144A and Regulation S bonds were sold under the bank’s $7.5 billion global medium-term loan program, and they will be listed on the Singapore Exchange Securities Trading Ltd.

In the Central & Eastern Europe region, JSC Development Bank of Kazakhstan launched KZT 100 billion of three-year bonds to yield 9 5/8%. The tenge-denominated bonds will be settled in dollars.

In Asia, Taiwan Business Bank Co. priced NT$1 billion of 0.7% three-year bonds at par, representing the bank’s first issuance of senior bonds for 2018 as the deal is set to be issued on Jan. 5.

And China-bsaed GCL New Energy Holdings Ltd.’s Suzhou GCL New Energy Investment Co. Ltd. subsidiary priced RMB 560 million of three-year green bonds with a 7½% coupon.

Proceeds will be used for renewable energy project investment and construction as well as to repay financing of renewable energy projects.

© 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.