Ukraine continues to struggle; investors eye MHP, Mriya Agro; more sellers for Lat-Am

By Christine Van Dusen

Atlanta, Aug. 8 – Ukraine remained in focus at the end of the week, with sovereign and corporate bonds declining, as Russian troops continued to gather at the Eastern border and fighting ramped up in and around Donetsk and Lugansk.

The region is “heading into what is likely to be a tense weekend,” according to a report from Eavex Capital. “Meanwhile, the main European indices declined for a seventh straight session on concerns that the Russia sanctions roll-out is threatening the euro zone’s economic recovery.”

Ukraine’s 2023 notes declined about 0.8 percentage points to 88.60 bid, 89.80 offered, the report said.

Ukraine-based poultry producer MHP SA’s 8¼% notes due in 2020 – which priced in March at par to yield Treasuries plus 697 basis points – entered the week’s end down about 2.4 percentage points at 83.90 bid, 87 offered.

Meanwhile, Ukraine-based Mriya Agro Holdings remained in the news, with Standard & Poor’s lowering its corporate credit rating to Selective Default from CCC after the company defaulted on some debt.

The ratings agency also lowered the issue rating on the group’s $400 million notes due 2018 from CC to CCC and the group’s $250 million notes due 2016 from CC to CCC.

Looking to Latin America, cash bond prices on higher-rated credits got a small boost from the United States’ rate rally, a New York-based trader said.

And sellers outnumbered buyers, he said, as investors sought to pare back risk.

In deal-related news, roadshows were set for Colombia’s Empresas Publicas de Medellin ESP (EPM), Indonesia, Hong Kong and China’s Kaisa Group Holdings Ltd.

EPM to hit the road

Colombia-based public services company EPM will embark on Aug. 11 for a roadshow to market a possible issue of notes, a market source said.

BofA Merrill Lynch, HSBC and Banco Itau are the bookrunners for the deal.

The roadshow will begin Aug. 12 in Boston and travel to New York, Los Angeles, Chicago, Miami and Lima before concluding on Aug. 21 in Santiago.

Roadshow for Indonesia

Indonesia has mandated CIMB, Emirates NBD, HSBC and Standard Chartered Bank as bookrunners for a sukuk issue, a market source said.

A roadshow will be held from Aug. 13 to 21.

No other details were immediately available on Friday.

Hong Kong picks banks

Hong Kong has mandated CIMB, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank as bookrunners for a benchmark-sized issue of Islamic bonds, a market source said.

A roadshow will be held starting Sept. 1.

Kaisa, Jordan in focus

China-based property developer Kaisa Group will hold a non-deal roadshow starting Aug. 20 to update investors, a market source said.

Citigroup and Credit Suisse are leading the roadshow.

And Jordan is looking to issue $1 billion of notes this year, backed by a U.S. guarantee, a market source said.

No other details were immediately available on Friday.

Shanghai Electric gets orders

The new issue of $500 million 3% notes due 2019 that Shanghai Electric Group Corp. priced at 99.793 to yield Treasuries plus 140 bps drew an order book of about $3 billion, a market source said.

About 53% of the orders came from Europe and 47% from Asia, with 53% from banks, 20% from fund managers, 15% from retail and 12% from insurers.

Goldman Sachs, Deutsche Bank, JPMorgan, Barclays, BNP Paribas, Guotai Junan, Huatai Financial and ICBC International were the bookrunners for the Regulation S deal.

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