Primary hosts China’s Sino-Ocean, CAR; Middle East busy; investors eye Petrobras earnings

By Christine Van Dusen

Atlanta, Jan. 28 – China’s Sino-Ocean Land Holdings Ltd. and China’s CAR Inc. sold notes on Wednesday during a busy and balanced trading session for many emerging markets bonds, including those from the Middle East.

Kuwait-based Burgan Bank saw two-way activity on it perpetual bond while investors nibbled at Dubai Islamic Bank PJSC’s paper, a trader said.

One trader was hopeful that February would bring new issuance from the Gulf region.

“Personally I think some issuers, even though they technically don’t ‘need’ the cash, should or will start to take a look at the market,” he said. “Long-dated bonds are a good 45 basis points to 55 bps wider on the month now ahead of rumored supply next month.”

Looking to Latin America, spreads for Brazil-based Petroleo Brasiliero SA (Petrobras) widened, then tightened to finish Wednesday about 12 bps to 14 bps wider, a New York-based trader said.

The state-run oil company reported its awaited third-quarter results on Wednesday but didn’t include the costs associated with an ongoing corruption scandal, a move that made investors anxious before cooler heads prevailed.

“Maybe investors are starting to put a little more focus on the positive aspects of the report, such as cutting down the investment plan,” the New York trader said. “The company is also stating that they have sufficient liquidity to cover the whole year.”

In deal-related news, Dubai’s Amira Nature Foods Ltd. planned a roadshow and Intercorp Peru Ltd. considered issuing notes. And market sources were whispering about the upcoming deal from Romania, which seemed to be taking a slow path to the primary market.

LatAm in focus

Taking a closer look at Latin America, Brazil-based Vale SA moved wider early in the session “in sympathy” with Petrobras, a trader said, and saw light selling.

Other Latin American corporates struggled to keep pace with the move in U.S. Treasuries and widened into Wednesday’s close, another New York trader said.

Some steel bonds from Brazil moved higher while high-grade notes from Mexico were quiet on Wednesday, he said.

Delhi airport notes move up

In trading, the new issue of notes from India’s Delhi International Airport (Dial) – 6.12% seven-year notes that priced Tuesday at par – opened Wednesday at 102.375, a trader said.

By midday the notes were seen at 102.50 bid, 102.75 offered before closing at 102.75 bid, 103 offered.

Citigroup, HSBC, JPMorgan and Standard Chartered Bank were the bookrunners for the Regulation S deal, the proceeds of which will be used to refinance debt.

Kaisa struggles, recovers

Bonds from China-based Kaisa Group struggled on Wednesday morning, then recovered, finishing the day about 2½ points to 6 points higher, a trader said.

The property developer, which is under investigation for ties to an allegedly corrupt Shenzhen official, has hired an adviser to accelerate Kaisa’s restructuring.

The company has also been in talks with China Vanke Co. and Shenzhen Overseas Chinese Town Co.

“The rest of high-yield Chinese property is 3/8-point to 1 point higher,” he said.

Indonesia notes rise

High-yield sovereign curves from Asia were roughly unchanged or ¼-point higher on Wednesday morning, a trader said.

Indonesia’s 2045 notes traded at 105.625 bid, 105.875 offered. The 5 1/8% notes due in 30 years priced at 98.867 to yield 5.2%, following talk in the 5¼% area.

Citigroup, HSBC and Standard Chartered Bank were the bookrunners for the deal.

The 3.95% notes due 2040 that the Philippines priced at par to yield 3.95%, or Treasuries plus 142.3 bps, traded Monday at 108.625 bid, 108.875 offered.

Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Standard Chartered Bank and UBS were the bookrunners for the Securities and Exchange Commission-registered deal.

Sino-Ocean prices bonds

China’s Sino-Ocean Land Holdings priced a $1.2 billion two-tranche issue of notes due Feb. 4, 2020 and 2027 (/BBB-/BBB-), a market source said.

The $700 million 4.45% notes due 2020 priced at 98.806 to yield 4.721%, or Treasuries plus 340 bps. The notes were talked at a spread in the 370 bps area.

The $500 million 5.95% notes due in 2027 priced at 99.737 to yield 6.1%, or Treasuries plus 429.6 bps, following talk in the 435 bps area.

HSBC, Goldman Sachs, JPMorgan and Morgan Stanley were the joint global coordinators for the Regulation S deal and bookrunners with Bank of China, BNP Paribas, Deutsche Bank, DBS and Wing Lung Bank.

The proceeds will be used to repay existing debt and for general corporate purposes.

Sino-Ocean Land is a Beijing-based property developer.

CAR sells notes

China-based car rental company CAR priced $500 million notes due in 2020 at a yield of 6 3/8%, a market source said.

The notes were talked at a yield of 7%.

Credit Suisse and Standard Chartered Bank were the joint global coordinators and, with Deutsche Bank, the joint bookrunners and lead managers for the Rule 144A and Regulation S deal.

Other pricing details were not immediately available on Wednesday.

The issuer is a rental car company based in Chaoyang, China.

“We like the new CAR due to its 31% market share in short-term rentals in a high-growth industry, and good shareholder support,” a trader said prior to the pricing. “We think the bonds could trade to 6%.”

Amira sets roadshow

Dubai’s Amira will depart on Friday for a roadshow to market a $225 million issue of five-year notes, a market source said.

Deutsche Bank, JPMorgan, Barclays, Jefferies and Key Bank are the bookrunners for the Rule 144A for life notes, which are non-callable for two years.

An investor call will be held on Feb. 2, and the roadshow will end on Feb. 5.

The proceeds will be used to support the development of the company’s international operations, to reduce short-term debt, to purchase land for its new manufacturing facility and for general corporate purposes.

The company exports packaged Indian specialty rice to more than 60 countries.

Intercorp to issue bonds

Peruvian financial services company Intercorp is looking to issue new senior notes, according to a report from Fitch Ratings.

The proceeds will be used primarily to refinance debt.

Other details were not immediately available on Wednesday.

Intercorp is a Lima, Peru-based financial services company.

Issuance from Tunisia

On Tuesday, Tunisia sold $1 billion 5¾% notes due Jan. 30, 2025 at 99.065 to yield 5 7/8%, a market source said.

The notes were talked at a yield in the 6% area.

Citigroup, JPMorgan and Natixis Securities are the joint lead managers for the Rule 144A and Regulation S deal.

“Closed up 2 points,” a trader said on Wednesday. “Basically, this is the only Tunisian bond one can buy, and it’s at z-spread plus 375 bps.”

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