InterCement Brasil, Greece bring new deals; EM investor sentiment weakens

By Christine Van Dusen

Atlanta, July 10 – Brazil’s InterCement Brasil SA sold notes on a weaker Thursday, as evidenced by what market sources described as a tepid reaction to Greece’s new issue of €1.5 billion three-year notes.

The sovereign’s deal came to the market with a 3½% yield via bookrunners BofA Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and JPMorgan.

“The deal is struggling to gather investor interest,” a London-based trader said.

Contributing to the overall negative tone was word that Banco Espirito Santo SA’s shares had been suspended from trading, just the latest negative headline for the Portuguese financial institution.

The Espirito Santo news was “a wake-up call,” according to a report from Erste Group Research.

“[Emerging markets] sentiment this morning is being affected by European concerns, mainly related to Portugal,” a London-based analyst said. “In Ukraine, the EU has added a further 11 names to the sanctions list, while President Obama is facing increasing pressure to launch further sanctions himself.”

Still, the crisis in Ukraine appears to be winding down, she said.

“It seems unlikely there will be major developments in the short-term on this front,” she said.

In trading on Thursday, Latin American bonds were weak at the start of Thursday’s session but ended nearly unchanged amid lighter flows and more selling than buying, a New York-based trader said.

Venezuela, for one, fell as much as 50 cents early in the day but finished at the previous night’s levels.

Argentina bonds, however, opened stronger and then saw some profit-taking, which pushed levels down from the previous night’s close, he said.

Klabin dips, Colbun ticks up

The new issue of notes from Brazil’s Klabin SA – 5¼% notes due 2024 that priced at par – traded as low as 99½ before closing at about 99.65, the New York trader said.

BB Securities, Bradesco BBI, HSBC, Itau BBA and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

Chile-based Colbun SA’s 4½% notes due 2024 that priced at 98.615 moved to 98.62 on low flows, he said.

Citigroup, JPMorgan and Scotiabank Capital were the bookrunners for the Rule 144A and Regulation S deal.

Transelec moves down

The new issue of $375 million 4¼% notes due Jan. 14, 2025 that Chile’s Transelec SA priced on Wednesday at 98.982 saw little Street activity before closing at 99¼, the New York trader said.

JPMorgan, Scotiabank Capital, Citigroup and MUFJ were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for refinancing and general corporate purposes.

InterCement prices bonds

In its new deal, Brazil-based concrete company InterCement Brasil, through subsidiary Cimpor Financial Operations BV, sold $750 million 5¾% notes due in 2024, according to a company filing.

The notes were talked at a yield in the 6% area, a market source said.

Bradesco BBI, BTG Pactual, Citigroup, HSBC and Itau BBA are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to prepay indebtedness and for general corporate purposes.

Cimento Tupi launches notes

Brazil’s Cimento Tupi SA launched a $350 million issue of 10-year notes at a yield of 6 5/8%, a market source said.

The notes were talked in the 7% area.

BB Securities, Bradesco BBI, Citigroup and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to prepay indebtedness and for general corporate purposes.

The issuer is a Sao Paulo-based cement products and services company.

Macedonia sets roadshow

Macedonia will set out on Monday for a roadshow to market a euro-denominated issue of notes, a market source said.

Deutsche Bank and HSBC are the bookrunners for the Rule 144A and Regulation S transaction.

Marketing trip for Entel

Chile’s Empresa Nacional de Telecommunicaciones SA (Entel) will set out on July 14 for a roadshow to market a possible issue of notes, a market source said.

JPMorgan and Santander are the bookrunners for the Rule 144A and Regulation S deal.

The issuer is a Santiago-based telecommunications company.

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