BBVA Colombia prices; oil prices impact Petrobras, Pacific Rubiales; China Cinda sets talk

By Christine Van Dusen

Atlanta, April 16 – BBVA Colombia SA sold notes on a Thursday that saw sellers emerge for Brazil-based Petroleo Brasiliero SA as oil prices continued to rally and weekly crude supplies from the United States rose less than expected.

Also on Thursday, most Asian bonds were firm at the start the session but closed unchanged, with sellers emerging for recent new issues, a London-based trader said.

Meanwhile, investors in Latin American debt were in risk-off mode and sold lots of Petroleo Brasiliero’s bonds, which moved wider by about 15 basis points, a trader said.

The company is expected to release its audited earnings report by the end of the month, another trader said, and the company could face another downgrade to junk.

Energy-related names from Latin America continued to benefit from oil prices, with Pacific Rubiales Corp. first dipping about 75 bps and then moving up at the end of the day.

Buyers were seen for the company’s 2021s, a sign that the company’s recent rally should continue once the market processes the impact of the drop in oil prices.

“Fundamental changes in the oil market are very positive for Pacific Rubiales,” according to a report from Schildershoven Finance BV. “Pacific Rubiales bonds are only for risk-seeking investors, as the company has a high level of debt.”

In other news on Thursday, Beijing-based China Cinda Asset Management Co. Ltd. set talk for a two-tranche offering of dollar-denominated and benchmark-sized notes due in five and 10 years.

Malaysia sukuk in focus

The new Malaysia sukuk performed well on Thursday, a trader said.

The 3.043% 10-year notes that priced at par to yield Treasuries plus 115 bps moved to a tight of 110 bps before closing at 115 bps bid, 112 bps offered.

About 28% of the orders were from Malaysia, 24% from the Middle East, 22% from other Asian countries, 16% from Europe and 10% from the United States.

Fund managers picked up 34%, sovereign and wealth funds 27%, banks 23%, pension funds 12%, insurers 3% and private banks 1%.

Notes tighten

Malaysia’s other tranche – a 4.236% 30-year issue that priced at par to yield Treasuries plus 170 bps – traded Thursday at a tight of 160 bps and closed at 162 bps bid, 159 bps offered, a trader said.

About 35% of the orders came from Asian countries outside of Malaysia, 29% from the United States, 19% from Malaysia, 15% from Europe and 2% from the Middle East.

Fund managers accounted for 45% of the orders, central banks and sovereign wealth funds 17%, insurers 17%, pension funds 12%, banks 5% and private banks 4%.

Two-way flow for Haitong

The new issue from China’s Haitong International Securities Co. Ltd. – 3˝% notes due 2020 that priced at 98.891 to yield 3.524%, or Treasuries plus 220 bps – saw good two-way flow on Thursday, a trader said.

The notes were spotted at 215 bps bid, 213 bps offered before closing the Asian session at 216 bps bid, 213 bps offered.

And Chinese property companies moved 1/8-point to 3/8-point lower, a trader said.

And the Philippines curve was unchanged while the Indonesia curve weakened by 1/8-point.

“But they had buyers out of Europe, which supported the market,” he said.

More selling of Lat-Am

Selling of Latin American assets increased throughout the day, a New York-based trader said.

Most high-grade names from the region were “hanging tough” during the session, he said. But Colombia’s Ecopetrol SA suffered ahead of a possible roadshow.

Eletrobras unit eyed

Also from Latin America, Brazil’s Centrais Eletricas Brasileiras SA (Eletrobras) bonds were receiving some attention on Thursday on the news that a subsidiary is being investigated for corruption.

But that didn’t hurt the company’s bonds, which got a boost from oil prices, Schildershoven Finance said in its report.

“Investors have a very positive outlook on the Brazilian bond market,” the report said. “Eletrobras bond prices were not affected by the latest announcement.”

BBVA Colombia prints bonds

In its new deal, Bogota-based BBVA Colombia priced an upsized $400 million 4 7/8% notes due April 21, 2025 at 99.914 to yield 4.886%, or Treasuries plus 300 bps, a market source said.

The notes, originally expected to total $300 million, were talked at a spread in the 325 bps area.

BBVA and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Korean bank launches notes

Industrial Bank of Korea launched a $600 million issue of notes due in 2020 at Treasuries plus 75 bps, a market source said.

The notes were talked at a spread of 75 bps to 80 bps.

BofA Merrill Lynch, Citigroup, Commerzbank, Deutsche Bank, HSBC, Mizuho Securities and IBK Securities are the bookrunners for the Rule 144A and Regulation S deal.

China Cinda gives guidance

China Cinda Asset Management set talk for a two-tranche offering of dollar-denominated and benchmark-sized notes due in five and 10 years, a market source said.

The five-year notes were talked at Treasuries plus 190 bps.

The 10-year notes were talked at Treasuries plus 240 bps.

BOC International, BofA Merrill Lynch, Credit Suisse, Cinda International Capital, CCB International and Citic Securities are the joint global coordinators and joint bookrunners. UBS, Deutsche Bank, Wing Lung Bank, ABC International, ICBC Asia, Morgan Stanley, Bank of China, Haitong International, DBS Bank, Standard Chartered Bank and China Merchants Securities are bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for working capital, investment and other general corporate purposes.

“Post-tightening, we see little value in these new issues,” a trader said.

TSKB releases order book

The final book for Turkey-based Turkiye Sinai Kalkinma Bankasi AS’ $350 million issue of 5 1/8% notes due April 22, 2020 – which priced Wednesday at 99.591 to yield 5.219%, or mid-swaps plus 375 bps – was about $900 million from about 125 investors, a market source said.

BNP Paribas, Citigroup, Commerzbank, ING and Standard Chartered Bank were the bookrunners for the Regulation S deal.

About 43% of the orders came from the United Kingdom, 17% from the Middle East, 13% from others, 12% from Switzerland, 10% from Asia and 5% from Germany.

Fund managers picked up 53%, banks and private banks 42%, insurers and pension funds 3% and others 2%.

The issuer is a subsidiary of Istanbul-based Turkiye Is Bankasi AS (Isbank).

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