Korea Gas, Shanghai Construction, Ping An sell notes; Zambia sets roadshow; Lat-Am quiet

By Christine Van Dusen

Atlanta, July 14 – Korea Gas Corp., Shanghai Construction Group Co. Ltd. and China’s Ping An Real Estate Co. Ltd. were among the corporates to print notes on a busy day for Asian issuance but a quiet one for debt from many other emerging markets.

Also selling notes during the session were Kazakhstan and South Africa’s Naspers Ltd.

“The early batch of deals, with all that new-issue concession, is failing to cause as much activity as one would hope,” a trader said.

Bonds from Asia were range-bound on Tuesday, consolidating after the recent rally, and lacked much momentum, a London-based trader said.

Investment-grade cash bonds closed the day unchanged to a little bit wider, he said, driven by the spate of new issues and the day’s lower Chinese equities.

“Korea closed unchanged, with small demand in the long end,” he said. “India was stable, with continued demand in Bharti Airtel Ltd.”

Sellers outpaced buyers during the afternoon, and sovereign bonds from Indonesia and Philippines were 25 cents lower on the long end of the curve, he said.

“Still seeing small buyers of Indonesia’s 2025,” he said. “The China space was 2 basis points wider, led by the oil space.”

Looking to Latin America-focused Pacific Rubiales Energy Corp., prices moved lower amid a steady but small stream of retail supply, a New York-based trader said.

But overall flows were light, he said.

In other trading from Latin America, corporates didn’t see much strong direction, another New York trader said.

Brazil-based Odebrecht SA’s curve joined other Brazilian high-grade names in reduced volume and inquiries, he said.

Ecopetrol SA was active, and trading in a tight range, on Tuesday, he said. And the curve for Mexico-based Cemex SAB de CV improved somewhat.

Lat-Am sovereigns quiet

Among Latin American sovereigns, trading was quiet on Tuesday, another trader said, with low-beta spreads closing near unchanged.

Five-year credit default swaps spreads for Brazil closed at 252.5 bps from Monday’s 252 bps while Mexico’s were unchanged at 125 bps.

Korea Gas prints notes

Korea Gas sold $500 million 3½% notes due July 21, 2025 at 99.824 to yield Treasuries plus 110 bps, a market source said.

The notes were talked at a spread in the 125-bps area.

Barclays, BofA Merrill Lynch, Deutsche Bank, HSBC, Mizuho Securities and UBS were the bookrunners for the Rule 144A and Regulation S deal.

Shanghai Construction bonds

Shanghai Construction – through Yongda Investment Ltd. – sold $400 million 3¾% notes due July 21, 2020 at 99.527 to yield 3.855%, or Treasuries plus 220 bps, a market source said.

Haitong International, HSBC, ANZ and Bank of China were the bookrunners for the Regulation S.

Issuance from Ping An

China’s Ping An Real Estate – through Fuqing Investment Management Ltd. – priced RMB 1 billion 4.85% notes due July 21, 2018 at par to yield 4.85%, a market source said.

Standard Chartered, Deutsche Bank and ICBC Asia were the bookrunners for the Regulation S deal.

The issuer is based in Shenzhen.

Naspers prices notes

South Africa’s Naspers $1.2 billion notes due in 2025 priced at Treasuries plus 310 bps, a market source said.

The notes were talked at a spread of 325 bps.

Barclays Capital, Citigroup, BofA Merrill Lynch and BNP Paribas were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes, including acquisitions and the repayment of credit.

Other details were not immediately available on Tuesday.

Naspers is a mass media company based in Cape Town.

“Looks interesting, given the pick-up to the 2020s,” a London-based trader said. “Some weakness on the curve and Eskom Holdings as the market pre-positions itself for this new supply.”

Kazakhstan brings new deal

Kazakhstan issued a two-tranche issue of $4 billion notes due in 2025 and 2045 in a Rule 144A and Regulation S deal, a market source said.

Citigroup, JPMorgan, Kazkommerts Securities and Halyk Finance were the bookrunners.

The deal included $2.5 billion notes due in 2025 that came to the market at Treasuries plus 285 bps and $1.5 billion notes due in 2045 that came to the market at Treasuries plus 335 bps.

Other details were not immediately available on Tuesday.

“Kazakhstan greys both around up 25 cents to 75 cents with minimal going on in the long end,” a trader said, prior to pricing.

Zambia to market notes

Zambia will depart on Thursday for a roadshow to market a dollar-denominated issue of notes, a market source said.

Barclays and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

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