Primary hosts China Great Wall, Oi, Vista, Banco Agricola; EM mixed on Treasury volatility

By Christine Van Dusen

Atlanta, June 11 – China Great Wall Asset Management Corp., Brazil’s Oi SA, Philippines-based Vista Land & Lifescapes Inc. and El Salvador’s Banco Agricola SA printed notes on Thursday as U.S. Treasury rates continued to gyrate, making for a mixed session for emerging markets assets.

“I really can’t begin to describe how fickle, flaky and thin this market is, and how surely it gets worse over the hot sticky summer months,” a London-based trader said.

Asian bonds managed to put in a firm session, with high-grade notes closing unchanged to 2 basis points tighter, another London-based trader said.

“High-beta names initially led the rally but fizzled into the close,” he said.

Oil companies from China rallied a couple of basis points tighter before closing unchanged, and bonds from Korea were quiet but firm, he said.

“India closed firm, with buyers in financials,” he said. “Corporates were mixed, with buyers in recent 10-year issues, while off-the-runs remained heavy.”

From the Middle East, National Bank of Abu Dhabi PJSC’s new issue of 5¼% perpetual notes that priced at par to yield mid-swaps plus 335 bps traded “really well” on Thursday, a trader said.

The notes moved as high as 100.40 during the session, he said, which was an “impressive effort.”

“Flows are moderate, but my word it’s choppy,” he said.

Looking to Latin America, longer-duration bonds that have been hard-hit managed to “pop back a bit,” a New York-based trader said, pointing to names like Braskem SA and its 2041s.

“All in all, still very quiet, though,” he said.

Petrobras century bond climbs

The new century bond from Brazil-based Petroleo Brasileiro SA held up on spread, moving up about 80 cents, he said, while Vale SA continued to tighten ahead of possibly stronger iron ore demand from China in the second half of the year.

Meanwhile, credit default swaps spreads for Brazil moved to 241.50 bps from 248.50 bps, while Mexico’s moved to 124.50 bps from 131 bps, another trader said.

Sovereign cash prices continued to move higher amid good two-way flows for the region, he said.

Indonesia bonds firm

Taking another look at Asia, bonds from Indonesia were firm on Thursday, moving up about ½ point, a trader said.

“Offers are far more in danger of trading than bids, at this stage,” he said. “This trade has the potential to gather momentum; Indonesia looks cheap, any way you approach it.”

Most buyers have focused on the belly of the sovereign’s curve, avoiding the volatility of the long end, he said.

“Philippines, on the other hand, has been unloved,” he said.

Ukraine bonds under pressure

Bonds from Ukraine have been under pressure so far this week, said Fyodor Bagnenko, a fixed income trader with Dragon Capital.

The notes have been pushed lower by aggressive offers for Ukraine’s 2017s, he said, “though liquidity remained subdued.”

Bank bonds have seen two-way flows, he said.

China Great Wall issues

In its new deal, China Great Wall Asset Management priced $1 billion notes due in 2018 at a spread of Treasuries plus 150 bps, following talk in the 155 bps area.

ABC, Standard Chartered Bank and CCB International were the joint global coordinators and – along with HSBC, Deutsche Bank, Wing Lung Bank, JPMorgan, BOC International, Societe Generale CIB, Credit Suisse, CICC HK Securities and Guotai Junan International – the joint bookrunners for the Regulation S deal.

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

Oi prices bonds

In another Thursday deal, Brazil’s Oi sold €600 million 5 5/8% notes due 2021 at a yield of 5¾%, a market source said.

BB Securities, BofA Merrill Lynch, HSBC, Santander GBM, Bradesco BBI, Citigroup, Deutsche Bank, BNP Paribas, BTG Pactual and Itau BBA were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used in connection with a concurrent tender offer and for repaying and prepaying indebtedness.

Other details were not immediately available on Thursday.

Vista Land sells notes

Philippines-based Vista Land & Lifescapes sold $300 million 7 3/8% notes due June 18, 2022 at 99.597 to yield 7.45%, a market source said.

DBS and HSBC were the bookrunners for the Regulation S deal.

The proceeds will be used for the tender of the company’s existing 2018 and 2019 bonds, for refinancing debt, for capital expenditures and for general corporate purposes.

The homebuilder is based in Mandaluyong City, Philippines.

Banco Agricola launches deal

El Salvador’s Banco Agricola launched a $300 million issue of notes due in June of 2020 at 6¾%, a market source said.

BofA Merrill Lynch and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

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

© 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.