Vale sells notes; Tunisia, China Singyes Solar advance deals; Turkey dips; Ghana, Uruguay eyed

By Christine Van Dusen

Atlanta, Feb. 6 – Brazil’s Vale SA sold notes on Monday – while Tunisia and China Singyes Solar Technologies Holdings Ltd. lined up new deals – during a busier and supportive session for emerging markets assets.

“The positive sentiment from Friday, driven by a favorable U.S. job market report and Trump’s executive order to review banking regulations, including Dodd-Frank, spilled into the new week and maintains the supportive backdrop for EM,” a London-based analyst said.

Trading picked up as Asian investors returned from the Lunar New Year holidays.

Buyers were seen for bonds from Philippines and Indonesia, with real-money demand in the long end during the Asian session.

“All eyes are on supply, to meet this continued demand for risk that the market is crying out for,” a trader said. “I would like to see some of the much discussed Middle East supply on the wires – Kuwait, Oman, Saudi Arabia and maybe Dubai. But nothing yet, and the squeeze continues as locals deploy cash in the region.”

In deal-related news, Buenos Aires is on a roadshow until Tuesday, to market a dollar-denominated issue of notes via BNP Paribas and JPMorgan.

And Tunisia is planning to issue euro-denominated bonds for general financing purposes.

The sovereign was downgraded on Friday to B+ by Fitch Ratings, “which reflects the weaker economic growth and negative spill-overs to external and public finances due to the collapse of tourism and a slowdown in investment,” the analyst said. “The ratings agency also hinted at elevated security risks. The outlook was set to stable.”

Turkey slows

Bonds from Turkey – which have outperformed during the last couple of weeks – slowed down on Monday, a trader said.

“Looks like we are starting to run out of steam after the 80 basis points rip tighter,” he said. “I guess it’s two-fold here. We have outperformed and those who bought the new deal or long end at the wides are taking profits.”

He thinks the sovereign could tap its 2027 notes.

“Wouldn’t be out of the question here, although I expect some long-end supply to come first, which in the current environment would be welcomed,” he said. “Banks and corporates are still one-way traffic, with spreads hitting multiyear tights versus the sovereign in some curves.”

Ghana, Uruguay in focus

Investors were also keeping an eye on Ghana, which is in the middle of an audit of undisclosed spending as the sovereign awaits talks with the International Monetary Fund.

The country is expected to miss its targets on GDP growth, primary balance and budget deficit, the analyst said.

And market sources were whispering about Uruguay, which could issue up to $2 billion of notes.

Vale sells bonds

In its new deal, Brazil’s Vale priced a $1 billion add-on to its 6¼% notes due Aug. 10, 2026 at 107.793 to yield 5.2%, a market source said.

The notes were talked in the 5.45% area.

BB Securities, Bradesco BBI, JPMorgan, MUFG and Santander were the bookrunners for the Securities and Exchange Commission-registered deal. Mizuho and SMBC Nikko were co-managers.

The proceeds will be used to refinance the company’s 4 3/8% euro-denominated notes due 2018, and for general corporate purposes.

Vale is a Rio de Janeiro-based producer of iron ore and nickel.

China Singyes ahead

China Singyes Solar Technologies is planning to issue dollar-denominated senior notes, according to a company filing.

BOCI Asia, HSBC and Guotai Junan Securities (Hong Kong) Ltd. are acting as joint global coordinators for the Regulation S deal. BOCI Asia, HSBC, Guotai Junan Securities, SBI China Capital Financial Services, China Everbright Securities and Sun Hung Kai Investment Services Limited are the joint lead managers and joint bookrunners.

At least 70% of the proceeds will be used for refinancing and repayment of existing offshore indebtedness and for general corporate purposes.

The solar energy company is based in Guangdong, China.

© 2015 Prospect News.
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