Hutchison Whampoa sells $1 billion oversubscribed perpetuals; Latvia's upgrade lifts bonds

By Aleesia Forni and Paul A. Harris

Columbus, Ohio, May 2 - Emerging markets saw a "fairly constructive" day with some paper coming out on Wednesday, according to a London-based source, including the new issue from Hutchison Whampoa Ltd.

Hutchison Whampoa sold $1 billion of subordinate guaranteed perpetual capital securities at par with an initial coupon of 6% on Wednesday, according to a market source.

The deal came at a spread of 517.6 basis points over the company's bonds non-callable until 2025.

The deal was "definitely oversubscribed," the source added, with most of the interest coming out of Asia.

HSBC and Goldman Sachs were bookrunners for the Rule 144A and Regulation S deal.

Asian secondary market

Also in the Asian space, Asian sovereign CDS were 1 bps to 2 bps tighter on Wednesday, according to a market source.

Real money demand continues for the new PT Pertamina bonds due 2022 and 2042.

The company priced $1.25 billion of 4 7/8% 10-year notes at 99.414 to yield 4.95% and $1.25 billion of 6% 30-year notes at 98.631 to yield 6.1% last week.

Also on Wednesday, the long end of the Indonesia curve was a point higher, while Indonesian high yield was unchanged to up ¼ point.

Additionally, Chinese property companies were up ½ point to 1 point on the day.

Latvia upgrade

Also in the secondary, Republic of Latvia's dollar-denominated 5¼% global bonds due February 2017 are up roughly 5/8 of a point over the past two days, according to a trader who cited Standard & Poor's move to raise the long- and short-term local currency and foreign currency sovereign credit ratings on the republic to BBB-/A-3 from BB+/B.

Latvia priced the $1 billion issue at 99.458 to yield 5 3/8% in mid-February.

According to S&P, the ratings balance a view of the government's proven political commitment to fiscal discipline, the economy's considerable flexibility and the material increase in exports as a share of GDP against the constraints of large external debt, relatively moderate GDP per capita and a lack of monetary policy flexibility.

The secondary also saw Russia's $3 billion 5 5/8% bonds due 2042 hit 107.5 bid during Wednesday's London session, though the bond settled ½ point lower later in the day, one source commented.

The bonds originally priced at Treasuries plus 250 bps, or 99.553, in late March.

Georgian Oil sees demand

The recently proposed deal from Georgian Oil and Gas Corp. JSC is seeing a good level of interest, a London-based source said.

Georgian Oil and Gas mandated JPMorgan and Goldman Sachs to arrange a series of investor meetings in London beginning on Wednesday.

Baoxin deal

Also in the primary, Baoxin Auto Group Ltd. plans to conduct an international offering of dollar-denominated senior notes to institutional investors, subject to market conditions and investor interest, according to a company news release.

Morgan Stanley and UBS are the joint lead managers and joint bookrunners.

The company intends to use at least $100 million of the proceeds to repay its short-term bank loans and plans to use the remaining portion to expand its network of dealership stores and repair centers, as well as for general corporate and working capital purposes.

Ajecorp roadshow

Ajecorp BV is also eyeing a possible bond offering and will hold fixed-income investor meetings in Europe, South America and North America from April 3 to April 8, according to a market source.

Bank of America Merrill Lynch, Jefferies, Rabobank and Interbank are leading the planned Rule 144A and Regulation S deal.

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