Hrvatska Elektroprivreda sells notes; Asian bonds flatten; Brazilian corporates outperform

By Christine Van Dusen

Atlanta, Oct. 20 – Croatia’s Hrvatska Elektroprivreda dd sold notes on a Tuesday that saw Asian bonds move very little, Brazilian corporates rally and most other Latin American spreads head wider as investors digested the upsized issue of bonds from Uruguay.

Corporate bonds from Brazil traded well, even as the sovereign curve weakened, a New York-based trader said.

“We’ve seen some selling, though not enough to call an end to this corporate rally,” he said.

Brazil’s five-year credit default swaps spreads moved to 480 basis points from 457 bps, while Mexico’s widened to 157 bps from 151 bps.

Venezuela’s 2027s closed at 43 from 43.25, and PDVSA’s 2017s finished at 70.75 from 70.65.

“Not much of an explanation for the weakness in today’s market,” another trader said. “It may be attributed to a modest back-up in rates and some ongoing supply fear after Uruguay issuance yesterday. Another possible factor driving this down trade is overbought conditions, which had us at levels not seen since the late-summer pre-selloff. The market may simply be trading prudently by taking some profits after a stellar run higher this month.”

Asian bonds opened mostly unchanged on Tuesday morning, with two-way activity seen for China-based Cnooc Ltd., a trader said.

Malaysia’s Petroliam Nasional Bhd. (Petronas) saw some profit-taking for its 2025s, he said.

Investment-grade financial companies put in “another lackluster session” on Tuesday morning, “with broader cash unchanged to a couple tighter,” he said.

Banks from India were a couple of basis points firmer, he said, while “Korea banks are unchanged, with only Woori Bank’s 2024 trading wider.”

The latter company made that move after announcing plans to hold a roadshow for a possible issue of notes.

Barclays Capital, Commerzbank, Credit Agricole, HSBC, JPMorgan and Societe Generale are leading Woori’s marketing trip, which will begin on Oct. 26.

Eco-City on roadshow

Meanwhile, Tianjin Eco-City Investment and Development Co., Ltd. was on a roadshow for a renminbi-denominated issue of notes, a market source said

Bank of China and Bank of China (Hong Kong) are the bookrunners for the Regulation S deal.

The roadshow began on Tuesday.

Tianjin Eco-City Investment and Development is a limited liability company indirectly owned by China’s Ministry of Finance.

Arab Petroleum inches higher

In other trading on Tuesday, the new issue of notes from Saudi Arabia’s Arab Petroleum Investments Corp. – $500 million 2.383% Islamic bonds due 2020 that priced on Monday at par – traded Tuesday at 100.05 bid, 100¼ offered, a trader said.

Goldman Sachs, Standard Chartered, Emirates NBD Capital, First Gulf Bank, NCB Capital and Noor Bank were the bookrunners for the Regulation S sukuk.

Middle Eastern investors took 80% of the $800 million-book while 11% went to Europe and 9% to Asia and others. Banks picked up 57%; insurers, pension funds and agencies 24%; fund managers 18%, others 1%.

Croatian company sells bonds

Croatia-based Hrvatska Elektroprivreda priced an upsized $550 million issue of 5 7/8% notes due in 2022, according to a company announcement.

Banca IMI, Morgan Stanley and UniCredit were the bookrunners for the Rule 144A and Regulation S notes.

The proceeds will be used for general corporate purposes and to purchase a portion of the outstanding $500 million of its 6% notes due in 2017, pursuant to a tender offer.

The notes traded on Tuesday about a point above reoffer, a trader said.

Qatar bank launches issue

Qatar Islamic Bank SAQ launched a $750 million issue of Islamic bonds due in five years at Treasuries plus 135 bps, a market source said.

Barwa Bank, Citigroup, HSBC, Noor Bank, QInvest and Standard Chartered are the bookrunners for the Regulation S deal.

Qatar Islamic Bank is a financial services company based in Doha, Qatar.

Uruguay upsizes

Uruguay upsized the $1.205 billion 4 3/8% amortizing notes due Oct. 27, 2027 that priced Monday at 99.140 to $1.7 billion, according to a company filing.

The notes came to the market at a yield of 4.475%, or Treasuries plus 245 bps.

The notes were talked at a spread in the 265-bps area.

Citigroup, HSBC and Itau BBA were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general government purposes and for liability management.

The notes will amortize in three equal installments in October of 2025, 2026 and 2027.

Nafin sets marketing trip

Mexico’s Nacional Financiera, SNC (Nafin) will depart on Thursday for a roadshow to market a dollar-denominated issue of green bonds, a market source said.

BofA Merrill Lynch, Credit Agricole CIB and Daiwa Capital Markets are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will start in Los Angeles and New York and then conclude on Friday in San Francisco and Boston.

The issuer is a Mexico City-based development bank.

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