Greece tumult has investors sidelined; Petrobras and Vale outperform; roadshows ahead

By Christine Van Dusen

Atlanta, June 12 – Asian credits softened and Latin American bonds saw very low volumes on Friday as investors awaited clarity on Greece and markets faced continued volatility in U.S. Treasuries.

This weekend, Greece is expected to present its creditors with new debt-reconstruction proposals. The sovereign’s current bailout expires at the end of this month.

“Seen profit-taking in performers while real-money demand was missing on the other end,” a London-based trader said.

Notes from India and Malaysia, he said, were unchanged by the end of the Asian session.

“Tech space was mixed,” he said.

Philippines-based Vista Land & Lifescapes Inc. saw its new issue of 7 3/8% notes due 2022 – which priced at 99.597 to yield 7.45% – trade at 100¼ and move as high as 100½, a trader said.

DBS and HSBC were the bookrunners for the Regulation S deal, which was more than three-times oversubscribed at more than $1 billion from 100 accounts.

About 91% of the orders went to Asia and 9% to Europe, with banks picking up 52%, fund managers 40% and private banks 8%.

The proceeds will be used for the tender of the company’s existing 2018 and 2019 bonds, for refinancing debt, for capital expenditures and for general corporate purposes.

From Latin America, trading was slow on Friday, though the new issue from Brazil’s Petroleo Brasileiro SA (Petrobras) managed to outperform the curve and the market, a New York-based trader said.

The 6.85% notes due 2115 priced at 81.070 to yield 8.45%, or Treasuries plus 549.3 basis points.

On Friday the bonds tightened in about 5 bps to close in on 500 bps, he said.

Deutsche Bank and JPMorgan were the bookrunners for the Securities and Exchange Commission-registered deal.

Mongolia, MFB ahead

In deal-related news, Mongolia is expected to print $350 million of new bonds this year, a market source said.

And sources say MFB Hungarian Development Bank plc is still waiting for the right time to issue its euro-denominated notes due in six years.

Mixed trading

Brazil-based Vale SA saw its bonds tighten too, this time about 3 bps, the New York trader said.

High-grade names from Brazil saw “slightly better bids across the board,” he said, but remained “under pressure and quite vulnerable.”

In other trading, bonds from Ukraine entered the end of the week under pressure, with a possible debt moratorium on the horizon, said Fyodor Bagnenko, a fixed-income trader with Dragon Capital.

Still, solid demand remained, he said.

Pacific Rubiales curve gains

Latin America-focused Pacific Rubiales on Friday was again in the spotlight, this time after announcing that it had received, from its lenders, the consents required to propose amendments to its credit agreements.

This followed the news that Pacific Rubiales had mailed an information circular to shareholders ahead of a special meeting on July 7 about the acquisition planned by Mexico-based Alfa SAB de CV and Harbour Energy Ltd., which is opposed by a group of shareholders that includes the O’Hara Group.

“Looks like we might very well see a dissident proxy circulated by the O’Hara Group on the Pacific Rubiales offer, as we have seen dueling press releases the last two days,” a New York-based trader said. “Curve saw a bit of appreciation today after trading slightly lower most of the week. It’s close to unchanged on the week, with extremely low client inquiry and Street volume.”

Kookmin Bank sets roadshow

South Korea’s KB Kookmin Bank will set out on June 15 for a roadshow to market a dollar-denominated issue of notes, a market source said.

BNP Paribas, Citigroup and Societe Generale CIB are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will be held in Asia, Europe and the United States.

Kookmin Bank is a lender based in Seoul.

AES Panama to market notes

AES Panama SRL will depart on June 15 for a roadshow to market a possible issue of notes, a market source said.

Deutsche Bank and Banco General are arranging the investor meetings, which will take place in Europe, the United States and Latin America.

The roadshow will end on June 17.

A Rule 144A and Regulation S deal is expected to follow.

AES Panama is a subsidiary of global power company AES Corp.

Roadshow for Power Finance

India’s Power Finance Corp. Ltd. will market a dollar-denominated issue of bonds during the week of June 15, a market source said.

Barclays, SBI Capital Markets and Standard Chartered Bank are the bookrunners for the deal.

The company is based in New Delhi.

ICBC prints bonds

On Thursday, Industrial and Commercial Bank of China Ltd. priced RMB 1.5 billion 3.9% notes due June 18, 2018 at par to yield 3.9%, a market source said.

HSBC, ICBC Asia, ICBC London, ICBC International and MUFG Securities were the bookrunners for the Regulation S-only deal.

The issuer is based in Beijing.

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