EM buyers chase same bonds; Bahrain, Kipco notes get attention; two-way flows for Lat-Am

By Christine Van Dusen

Atlanta, Aug. 12 – Buyers outpaced sellers in trading of emerging markets bonds as trading of Latin American assets perked up on an otherwise mostly quiet Tuesday for the asset class.

“The Street is, of course, chasing the same bonds and offering the same bonds,” a London-based trader said. “Flows today were typically skewed to better buyers, and few bonds are nigh-on-impossible to locate.”

Investors were mostly interested in notes from Bahrain and Kuwait, including Kipco Projects Co.’s 2020s, which have moved from 124 1/8 to 126½ bid.

The London trader expects to see the primary market pick up for Middle Eastern issuers in the coming weeks.

“This is welcome, given the still reasonably large redemption profile in the region,” he said. “It’s interesting to see a few of the higher-yielding, higher-beta names feel offered.”

Some perpetual bonds from the Gulf region moved higher on Tuesday, with Dubai Islamic Bank’s notes trading at 104½ and Abu Dhabi Islamic Bank trading near 105, he said.

Meanwhile, bonds from Latin America saw solid two-way flows on Tuesday, a New York-based trader said.

While low-beta names tightened by as much as 2 basis points on Tuesday, high-yielding names – like Venezuela – dipped by as much as 1¼ points, he said.

The most active bonds in Brazil were the sovereigns 2025s and 2045s, he said.

Mexico bonds were quiet during the session while flows were solid for Colombia, with its 2041s trading at 119.22.

Later in the session, Mexico’a Cemex SAB de CV was again the outperformer, as it continued to recover from a recent beating in the market, a trader said.

Brazil’s Votorantim SA saw good gains, but others – like Brazil’s Gerdau SA – ended the session unchanged, he said.

Corporate bonds from Chile were mostly quiet but stronger, he said.

Berau pulls deal

In deal-related news, Indonesia-based coal producer Berau Coal Energy Tbk. postponed its planned issue of dollar-denominated and benchmark-sized notes due in five years, a market source said.

The notes were talked at a yield in the 10½% area.

Barclays, Citigroup and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds were to be used for the repayment and redemption of the company’s outstanding 2015 notes.

Indofood picks banks

Also on Tuesday, Indonesia’s PT Indofood Sukses Makmur Tbk has mandated DBS and Standard Chartered Bank as bookrunners for a possible issue of Singapore dollar-denominated notes, a market source said.

No other details were immediately available.

Indofood is a Jakarta-based food manufacturer and supplier that is 50.1% owned by First Pacific Co. Ltd., a Hong Kong-based investment and management company in the telecommunications, infrastructure, consumer food products and natural resources industries.

Far East Horizon sells notes

On Monday, China’s Far East Horizon Ltd. priced A$200 million 6 1/8% notes due Aug. 19, 2019 at 99.723, a market source said.

ANZ and Westpac were the bookrunners for the deal.

Far East Horizon is a financial leasing unit of Sinochem Group, which is a Hong Kong-based business conglomerate with interests in agriculture, energy, chemicals, real estate and finance.

© 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.