Peru’s Cofide issues notes; Greek banks stay closed; Chinese markets roiled; deals ahead

By Christine Van Dusen

Atlanta, July 7 – Investors remained risk-averse on Tuesday after Greece extended its banking holiday and corporates from China suspended trading in an effort to stem selling after the premier didn’t mention the market crisis in his statement on the economy.

According to an announcement from the National Bank of Greece, lenders and the Athens Exchange will remain closed through July 8. And while the European Central Bank decided to maintain Emergency Liquidity Assistance at the June 26 level, “haircuts on Greek collateral were increased,” according to a report from Barclays Capital. “We expect the ELA to be shut by July 20.”

Greece is now required to present proposals to euro zone leaders.

“While our baseline is now a Greek exit from the [Economic and Monetary Union], we don’t entirely rule out a political agreement following today’s euro group meeting and euro summit,” the report said.

Meanwhile, U.S. Treasuries rallied and many emerging markets bonds moved wider, a London-based trader said.

Africa “woke up on the wrong side of the tent,” he said, with spreads 10 basis points to 15 bps wider.

The Gulf region was a “mixed bag” but saw plenty of investor interest, with better buyers of perpetuals and generally wider spreads on the move in rates, he said.

And banks from Turkey had some buyers, especially of 2017 and 2018 paper, which moved wider.

Against this backdrop, Peru’s Corporacion Financiera de Desarrollo SA (Cofide) printed a two-tranche issue of $800 million notes due in four and 10 years.

In other news, market sources were whispering about a possible issue of as much as $5 billion of notes from Iraq that could print this summer. And the Philippines could be looking at issuing bonds in 2016.

Cofide sells notes

In its new deal, Lima-based development bank Cofide priced an $800 million issue of notes due in 10 and four years, a market source said.

The $200 million reopening of the company’s 3¼% notes due in 2019 priced at Treasuries plus 185 bps, after talk in the 180-bps area.

The original 2019s priced at 99.785 to yield Treasuries plus 160 bps.

The $600 million notes due in 2025 priced at a yield of 4.874%, or Treasuries plus 265 bps. The notes were talked in the 185-bps area.

The tap of the 2019s was talked at a spread in the Treasuries plus 180-bps area.

Citigroup, Morgan Stanley and Standard Chartered were the bookrunners for the deal.

Asian bonds firm, then fizzle

In trading, Asian bonds firmed up a bit on Tuesday morning, with investment-grade cash bonds unchanged to 2 bps tighter, a London-based trader said.

“However, the positive tone fizzled quickly, with sellers into the rally,” he said. “We closed the day 3 bps to 5 bps wider.”

China-based Cnooc Ltd. saw its 2025s trade up at 159 bps before settling closer to 163 bps, about 4 bps wider. And Bank of China’s curve was heavy, with the 2025s moving from 163 bps to 170 bps.

“Malaysia closed 5 bps wider, with [Petroliam Nasional Bhd. (Petronas)] 2025 last down at 136 bps,” he said.

South Korea widens

Bonds from South Korea closed 1 bp to 2 bps wider, with Woori Bank’s 2024s trading up, a trader said.

“India is resilient and well-supported, with spreads unchanged,” he said. “We continue to see good demand in the 10-year corporates.”

In the afternoon, Asian bonds saw active one-way flow, with some heavier selling, another London trader said.

“We still see small buyers in China technology, yet oil felt a bit heavy with crude prices extremely vulnerable the last few days,” he said. “Similar stories in Asia high-yield.”

Lat-Am moves wider

From Latin America, low-beta spreads were wider on the day as the previous session’s risk-off attitude carried through, a trader said.

Spreads finished the at the day’s wides, though there was a small rally late in the afternoon, he said.

Five-year credit default swaps spreads from Brazil moved from 261 bps to 266 bps while Mexico’s moved from 131 bps to 137 bps.

More widening from Lat-Am

From Chile, Cencosud SA’s spreads continued to widen, a New York-based trader said.

And oil-related companies like Petroleo Brasileiro SA and Vale SA widened as well, with clients better sellers of both, he said.

High-yield names traded lower on the day, with Venezuela slumping and Argentina consolidating in a recent range, he said.

Pacific Rubiales in focus

Looking to Latin America-focused Pacific Rubiales Energy Corp., the company was in focus again on the news that Mexico-based Alfa SAB de CV and Harbour Energy Ltd. may up their takeover bid.

Their bid may not rise as high as that demanded by bondholder who oppose the deal, but the offer could end up in some middle ground, a market source said.

Bonds from Pacific Rubiales were mostly quiet, in terms of volumes, and longer-dated paper firmed up a bit.

Ukraine quiet

From Ukraine, bonds have been mostly quiet so far this week, with some better bids but very little trading of sovereign notes, said Fyodor Bagnenko a fixed income trader with Dragon Capital.

“Quasi-sovereigns remained active,” he said.

China Overseas launches notes

China Overseas Land & Investment Ltd. launched a four-year issue of euro-denominated and benchmark-sized notes due in four years at a spread of mid-swaps plus 155 bps, a market source said.

Agricultural Bank of China, BNP Paribas, DBS Bank, HSBC and ICBC are the joint global coordinators and – along with CCB, Deutsche Bank, JPMorgan and UBS – the joint bookrunners for the Regulation S deal.

China Overseas is a Hong Kong-based construction and development company.

HNA Tourism on roadshow

China’s HNA Tourism Group Co. Ltd. is on a roadshow for a possible issue of notes, a market source said.

ABC International, Haitong International, Orient Capital and JPMorgan are the bookrunners.

HNA is a Beijing-based tourism services company.

Issuance ahead for Apicorp

Saudi Arabia’s Arab Petroleum Investments Corp. (Apicorp) has mandated four banks for a dollar-denominated issue of Islamic bonds, a market source said.

First Gulf Bank, GIB Capital, NCB Capital and Standard Chartered are the bookrunners for the Regulation S sukuk.

© 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.