Pacific Rubiales in news; Poland suffers from Greece contagion; Philippines notes ‘stuck’

By Christine Van Dusen

Atlanta, May 26 – Latin America-focused Pacific Rubiales Energy Corp. remained in focus on Tuesday, with a group of investors from Venezuela still opposing a takeover plan, during an otherwise quiet session for emerging markets assets.

Mexico-based Alfa SAB de CV and Harbour Energy Ltd. have teamed up to take over Pacific Rubiales for about $5.30 a share in an all-cash deal that was unanimously approved by the board of directors. The group of Venezuelan investors with a 19.5% stake in Pacific Rubiales does not want the deal to go forward and plans to vote against it.

“They are pointing out that Alfa’s bid includes a cost-free option to terminate a bid for Pacific Rubiales if holders of more than 5% of the company’s common shareholders dissent,” according to a report from Schildershoven Finance BV. “Future dynamics are difficult to predict.”

In response to the news, Pacific Rubiales’ curve strengthened a touch at the open, a New York-based trader said, as investors continued to ponder what this all will mean for the company.

Meanwhile, trading of sovereign bonds from Asia was slow on Tuesday, following Monday’s Memorial Day holiday in the United States, a London-based trader said.

“Prices were mostly unchanged across the Indonesia and Philippines curves,” he said. “The exception is the Indonesia 2025s, down ¼ point at 100 3/8 bid, 100 5/8 offered.”

The notes priced at par to yield 4 3/8% via CIMB Group, Dubai Islamic Bank, HSBC and JPMorgan in a Rule 144A and Regulation S deal.

Bonds from the Philippines were particularly quiet, with the 2040s “stuck” near 105 bid, 105¼ offered, he said.

“The 4.2% 2024s feels technically firm at 11 7/8 bid, 112 1/8 offered,” he said.

In other news on Tuesday, tensions related to Greece’s financial and political woes were spreading to other European markets, particularly to Poland, according to a report from Barclays Research.

“Poland’s benchmark equity index is also down today, following a circa 1½% drop yesterday, while the Polish zloty weakened further on the opposition winning the presidency,” the report said.

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