Bharat Petroleum sees buyers; Korean bonds sell off; Latam, Sinopec, AFC, Kosep plan deals

By Paul A. Harris

Portland, Ore., April 5 – Recent issues were dominating secondary market action in the New York morning, according to traders.

Among Asian high-grade names, Bharat Petroleum Corp. Ltd.’s 4 3/8% notes due Jan. 17, 2027 were seeing better buyers.

Korean bonds sold off somewhat on the news of the latest North Korean missile test.

However, there were selective buyers in the Korea National Oil Corp. 2½% notes due 2026, a source said.

Fast money accounts were looking for Asian paper early in the session, but the market seems well offered, the source said.

High-yield sovereign names, Philippines and Indonesia were unchanged to 1 basis point tighter.

Latam Airlines whispers low 7%

In the primary market Chile’s Latam Airlines Group SA is guiding a to-be-determined amount of dollar-denominated seven-year notes (B+/B+) in the low 7% area, according to a market source.

The offer is expected to price on Thursday.

BofA Merrill Lynch and Credit Suisse are the global coordinators. BNP Paribas, BTG Pactual, Natixis, and Santander are the bookrunners.

Sinopec plans three tranches

Elsewhere, Sinopec announced a benchmark offering of dollar-denominated notes in three tranches.

The deal includes three-year notes talked at Treasuries plus 120 bps, five-year notes talked at Treasuries plus 130 bps and 10-year notes talked at Treasuries plus 150 bps.

There will also be a 30-year tranche, which will be issued on reverse inquiry, a trader said.

Price talk on the three-, five- and 10-year notes was right on top of present secondary market levels, leaving little room for appreciation of the paper in the secondary market, the trader remarked.

Nevertheless, the deal will likely be well subscribed, the source added.

AFC, Kosep prep deals

Nigeria’s Africa Finance Corp. (AFC) was set to wind up a roadshow today in Asia and the United States.

The Lagos-based infrastructure-financing entity is attempting to place dollar-denominated seven-year notes.

The deal could price as early as Thursday.

And Korea South-East Power (Kosep) guided a dollar-denominated offering of three-year bonds (Aa2) at Treasuries plus 110 bps.

The issuer, a subsidiary of Korea Electric Power Corp., plans to use the proceeds for general corporate purposes, including debt refinancing.

Petra Diamonds upsizes

In other news, Petra Diamonds Ltd. priced an upsized $650 million issue of 7¼% five-year senior secured second-lien notes (B2/B+) at 99.993 to yield 7¼% on Wednesday, according to a market source.

The issue size was increased from $600 million.

The yield printed inside initial yield talk in the 7½% area.

The offering played to both emerging markets and high-yield accounts, sources say.

Joint global coordinator and joint bookrunner Barclays will bill and deliver. RBC was a joint global coordinator and joint bookrunner. BMO was also a joint bookrunner.

The St. Helier, Jersey-based company plans to use the proceeds to refinance $300 million of 8¼% senior secured second-lien notes due 2020 and to repay all of its drawn bank facilities.

Petra Diamonds mines, processes and sells rough diamonds and is focused on mines in Tanzania and South Africa.

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