Ecopetrol, CIFI bring new issues to market; spreads tighter, flows mixed; Marfrig on deck

By Christine Van Dusen

Atlanta, Sept. 11 - Colombia's Ecopetrol SA and China's CIFI Holdings Group Co. Ltd. priced notes as U.S. Treasuries stabilized and emerging markets spreads tightened ahead of the Federal Reserve's policy-setting meeting next week.

"Impressive effort, for the most part, from the market today," a London-based trader said. "There was a good tone and bid to most credits."

The Markit iTraxx SovX CEEME ex-EU index spread on Wednesday opened at 237 basis points over Treasuries, tighter by 7 bps. The Markit iTraxx Crossover index spread - seen Tuesday at 394 bps - narrowed 1 bp to 393 bps on Wednesday.

"Mixed flow in Central and emerging Europe, the Middle East and Asia, with spreads a touch wider," a London-based analyst said. "Turkey credit default swaps have performed well, coming in 25 bps since the highs last week as Syrian tensions have relaxed."

The new four-tranche issue of $6 billion notes due in 2019, 2030 and 2043 and €725 million notes due in 2020 from Russia was active in trading on Wednesday, a trader said.

"The 2019s and 2023s are up ¼ point while the 2043s are up ½ point," she said.

Most bonds from Latin America traded higher and tighter on Wednesday, a New York-based trader said.

"But there are more than a few that are not partaking," he said.

Banco BBVA's 2022s underperformed and saw sellers, "but they were not met with enough buyers to send the bonds up over one point," he said.

Bonds from Mexico's Cemex SAB de CV put in another strong session, trading up more than one point.

"Bancolombia paper is particularly strong after getting beat down hard with sellers and short sellers the last few weeks," he said. "Chile banks were quiet."

And bonds from Brazil's Vale SA were tighter by 5 bps to 10 bps, he said.

Middle East names make moves

The most moves were made by higher-beta names like Bahrain and corporates from Dubai.

"Very good demand for Dubai bank names," the London-based trader said. "Makes sense for some of these guys to look at issuance soon."

Saudi Electricity Co.'s notes were popular, with the 2022s and 2023 favored over the 2017s and 2043s.

"Most of the Qatar and Abu Dhabi curves are well-bid but not screaming tighter," he said. "Perpetuals only saw retail investor demand."

Majid al-Futtaim Holdings put in an "impressive effort" on Wednesday, he said, noting that the bonds were as much as 25 bps tighter.

"Saw some demand for Abu Dhabi National Energy Co. (TAQA)," he said. "The curve has steepened over the month."

And buyers were spotted for all three bonds from Emirates airline.

"Another active day with better buying seen," he said.

Ecopetrol does deal

In its new deal, Colombia-based petroleum company Ecopetrol priced a three-tranche issue totaling $2.5 billion of notes due 2018, 2023 and 2043.

The 4¼% five-year notes priced at 99.559 to yield Treasuries plus 260 bps. The notes were talked at a spread in the Treasuries plus 300 bps area.

The 5 7/8% 10-year notes priced at 99.033 to yield Treasuries plus 305 bps. They were talked at a spread in the Treasuries plus 325 bps area.

Ecopetrol's new 30-year tranche carried a 7 3/8% coupon and priced at 99.474 to yield Treasuries plus 350 bps.

BofA Merrill Lynch and Morgan Stanley were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes, including capital expenditures.

"All of Ecopetrol's new tranches were up over 2 points with only buyers seen," a New York-based trader said.

CIFI prints bonds

China-based CIFI, a property developer, priced a $225 million add-on to its existing 12¼% notes due 2018 at 104, a market source said.

Citigroup, Deutsche Bank, Haitong International, HSBC and Standard Chartered Bank were the bookrunners for the deal.

The proceeds will be used for refinancing existing debt, for the acquisition of new projects or land for development, for the development of existing projects and for general corporate purposes.

Marfrig gives guidance

Brazil-based food processing company Marfrig Alimentos SA set initial talk in the mid-11% area for its upcoming dollar-denominated issue of eight-year notes, a market source said.

BTG Pactual, Bradesco BBI and Credit Suisse are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund the tender offer for the company's 9 5/8% notes due 2016.

Marfrig previously announced an offer to purchase for cash any and all of the outstanding 2016 notes.

Arcos Dorados deal ahead

Argentina-based McDonald's restaurants operator Arcos Dorados Holdings Inc. is planning to issue new notes concurrent with a tender offer, according to a company announcement.

The tender offer exchanges the company's outstanding 7½% notes due 2019 for recent, dollar-denominated 6 5/8% notes due 2023.

The proceeds from the new notes will be used to pay the principal and premium on the existing 2019 notes in connection with the tender offer, to repay short-term indebtedness, to unwind the company's cross-currency interest rate swap with Bank of America and for general corporate purposes.

Borets sets roadshow

Borets International Ltd. has mandated Deutsche Bank, Morgan Stanley and Sberbank to lead a roadshow for a dollar-denominated deal starting on Thursday, a market source said.

The roadshow for the Rule 144A and Regulation S bond will begin in Switzerland and travel to the West Coast of the United States before stopping in London and New York and concluding on Sept. 18 in Boston.

Moscow-based Borets International provides electric submersible pump systems for the oil industry.

Vista Land taps banks

Philippines-based homebuilder Vista Land & Lifescapes Inc. has mandated HSBC and UBS as bookrunners for a roadshow to market a possible issue of dollar-denominated notes, a market source said.

The marketing trip will begin Friday and take place in Hong Kong and Singapore.

A Regulation S deal may follow, subject to market conditions.

Gazprombank will hit road

Russia-based lender Gazprombank OJSC has mandated Barclays, BNP Paribas, BOC International, Goldman Sachs, GPB Financial Services and Societe Generale to arrange a roadshow for a dollar-denominated issue of notes, a market source said.

The roadshow will begin on Sept. 16 and take place in Singapore, Hong Kong, Switzerland and London.

A Regulation S deal is expected to follow.

Pemex sells notes

On Tuesday, Mexico's Petroleos Mexicanos SAB de CV (Pemex) priced a $400 million issue of 2.83% notes due 2024 at par to yield 2.83%, a market source said.

BNP Paribas and Credit Agricole were the bookrunners for the transaction.

Pemex is a Mexico City-based petrochemical company.

Indonesia deal oversubscribed

Indonesia's new issue of $1.5 billion 6 1/8% Islamic bonds due 2019 that priced at par drew a final order book of $5.7 billion, a market source said.

About 290 accounts were involved, with 25% from Asia, 24% from the United States, 20% from the Middle East, 16% from Europe and 15% from Indonesia.

Funds picked up 51%, banks 34%, central banks and sovereign wealth funds 7%, insurers 4% and private banks 4%.

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

Lat-Am picks up Inkia

About 49% of the orders for Peru-based Inkia Energy Ltd.'s recent $150 million tap of its 8 3/8% notes due 2021 came from Latin America, a market source said.

The notes priced at 104.75 to yield 7.537% with BofA Merrill Lynch and Credit Suisse in a Rule 144A and Regulation S deal.

Pension funds took up 47% of the orders, private banks 22%, banks 18%, asset managers 10% and hedge funds 3%.

PTTEP final book

Also drawing orders was the new issue of notes from Thailand's PTT Exploration & Production PCL.

The energy and exploration company priced $500 million 3.707% notes due 2018 at par to yield Treasuries plus 205 bps.

The deal attracted a final book of $2.2 billion from 175 accounts, with 49% from Asia, 26% from the United States and 25% from Europe.

Fund managers accounted for 44%, banks 31%, insurers 11%, pension funds 10% and private banks 4%.

Goldman Sachs, HSBC, Standard Chartered Bank and UBS were the bookrunners for the Rule 144A and Regulation S deal.

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