Global Logistics Properties, Hungary sell notes; Brazil, China corporate offerings on deck

By Christine Van Dusen

Atlanta, May 4 - China's Global Logistics Properties Ltd., the Republic of Hungary, HSBC Bank Brasil SA and Brazil's Marfrig Holdings (Europe) BV sold notes on a Wednesday that saw emerging markets investors continuing to clamor for paper - only to find that the new deal pipeline hasn't fully opened up yet.

"Surely issuance has to be forthcoming," a London-based trader said. "The market needs some supply to take the sting out of spreads. Absolute rates are low and demand remains solid."

Said another London-based market source: "With such strong demand and also low absolute yields, you'd expect more supply. But for now it's not coming."

The picture could soon change, however, given that numerous issuers took steps toward the market on Wednesday, including Brazil's Cimento Tupi SA, Colombia's Grupo de Inversiones Suramericana SA and Mexico's Petroleos Mexicanos SAB de CV (Pemex).

Also on that list is Hong Kong's China Qinfa Group Ltd., Hong Kong's China Resources Land Ltd., Hong Kong's Beijing Enterprises Holdings Ltd. Poland's Cyfrowy Polsat Finance AB, Kazakhstan's JSC Kazkommertsbank, South Africa's FirstRand Bank Ltd. and Senegal.

The JPMorgan Emerging Markets Bond Index Plus spread was just 1 basis point wider, at Treasuries plus 277 bps, with Argentina wider by 8 bps and Venezuela by 6 bps.

Global Logistics sells notes

China-based logistics facilities provider Global Logistics Properties priced RMB 2.65 billion notes due May 11, 2016 at par to yield 3 3/8%, a market source said.

JPMorgan, Goldman Sachs and Citigroup were the bookrunners for the Regulation S notes.

Proceeds will be used for general corporate purposes.

And Hungary sold €1 billion notes due Jan. 11, 2019 to yield mid-swaps plus 270 bps, a market source said.

Deutsche Bank, ING and Unicredit were the bookrunners for the transaction.

"Hungary keeps spraying the market with supply," a source said. "This time it's 20 bps cheap to their curve. This should be it for them for a while."

HSBC Brasil prints bonds

Also on Wednesday, HSBC Bank Brasil - part of HSBC Holdings plc - priced $500 million 4% notes due May 11, 2016 at 99.713 to yield 4.064%, or Treasuries plus 212.5 bps, a market source said.

HSBC was the bookrunner for the Rule 144A and Regulation S notes.

And Brazil's Marfrig priced $750 million 8 3/8% notes due May 9, 2018 at 98.835 to yield 8.6%, a market source said.

BB Securities, Bradesco BBI, Deutsche Bank, Itau and JPMorgan were the bookrunners for the Rule 144A and Regulation S notes.

These new deals followed the Tuesday pricing of India-based commercial lender Syndicate Bank's $500 million 4¾% senior notes due Nov. 6, 2016 at 99.771 to yield 4.802%, or Treasuries plus 285 bps, a market source said.

Bank of America Merrill Lynch, Citigroup, Deutsche Bank, HSBC, JPMorgan, RBS and Standard Chartered were the bookrunners for the Regulation S deal.

Cimento Tupi sets price talk

From Brazil, cement and concrete company Cimento Tupi set price talk for its planned dollar-denominated issue of seven-year notes at 10%, a market source said.

The deal was initially expected to carry a 10-year tenor.

Bank of America Merrill Lynch is the bookrunner for the Rule 144A and Regulation S notes, which are non-callable for five years and include a change-of-control put at 101%.

Suramericana plans roadshow

Also from Latin America, Colombia-based investment company Suramericana will set out on a roadshow starting Thursday for a dollar-denominated issue of benchmark-sized notes, a market source said.

Bank of America Merrill Lynch and JPMorgan are the bookrunners for the Rule 144A and Regulation S transaction.

The roadshow will begin in London and travel to Boston and Los Angeles before wrapping up on May 11 in New York.

And Mexico-based petrochemical company Pemex plans to embark on a roadshow for an issue of dollar-denominated notes on May 9, a market source said.

The marketing trip will begin in London and travel to Paris and Amsterdam before concluding on May 11 in Germany and Switzerland.

Also from Mexico, the recent issue of 9½% notes due 2017 from satellite service provider Satelites Mexicanos SA de CV (Satmex) - which came to the market on Monday at par to yield 9½% - attracted $2.5 billion of orders from 150 accounts, a source said.

Hong Kong issuers prep deals

Hong Kong-based coal company China Qinfa Group set the tenor for its planned issue of dollar-denominated notes at five years, a market source said.

UBS is the bookrunner for the Rule 144A and Regulation S notes, which are non-callable for three years and are being marketed on a roadshow that started Wednesday.

Proceeds will be used for general corporate purposes, to refinance existing debt, for potential acquisitions and for capital expenditures.

And Hong Kong-based property developer China Resources Land set the maturity for its planned benchmark-sized issue of dollar notes at up to 10 years, a market source said.

HSBC, BOC International and DBS Bank Ltd. are the bookrunners for the Rule 144A and Regulation S offering, which set out on a roadshow on Wednesday.

Beijing Enterprises sets talk

Also from Hong Kong, business conglomerate Beijing Enterprises Holdings set price talk for its planned benchmark-sized issue of 10- and 30-year dollar notes, a market source said.

The 10-year notes are being talked at the Treasuries plus 200 bps area. The 30-year notes are being talked at 20 bps to 25 bps over the 10-year spread.

Bank of America Merrill Lynch, HSBC, Morgan Stanley, Credit Suisse and UBS are the bookrunners for the Rule 144A and Regulation S notes, which are expected to price this week through Mega Advance Investments Ltd.

Cyfrowy Polsat plans notes

In other deal-related news, Poland-based pay-television company Cyfrowy Polsat Finance is planning a €350 million issue of seven-year notes, a market source said.

Credit Agricole, Citigroup and RBS are the bookrunners for the Rule 144A and Regulation S notes.

Proceeds will be used to refinance debt incurred related to the acquisition of TV Polsat.

And Kazakhstan-based lender Kazkommertsbank whispered its planned issue of seven-year notes at 8 5/8%, a market source said.

JPMorgan and UBS are the bookrunners for the Rule 144A and Regulation S deal, which is being marketing on a roadshow that began Monday.

Pricing is expected this week.

"This price talk for KKB seems unreal to me," a trader said. "When they last tried and failed to print, the spread was 800 bps. And now you are being offered a small premium to a manipulated curve."

Said another source: "I'm not sure who buys that."

FirstRand taps bookrunners

Also on Wednesday, South Africa-based lender FirstRand Bank mandated Mitsubishi UFJ Securities as a bookrunner for a roadshow starting Monday, a market source said.

"That's drawn attention to the sector," a London-based market source said.

The trip will begin in London and travel to Zurich before wrapping up on May 11 in Zurich.

"All existing South Africa paper is now very short and tightly held," a trader said. "It's firing."

Said the London-based market source: "It's been real money demand for South Africa's long end that's brought the most excitement."

Meanwhile, Nigeria was performing well on Wednesday. "Nigeria remains a rock as election worries have proven unfounded, with the bonds tighter by 35 bps over the month," the source said.

Gabon and Ghana, however, are both about 35 bps wider.

And Senegal is readying a benchmark-sized issue of dollar bonds that is being talked at the low- to mid-9% area.

"I tend to think it will be OK," the trader said. "It's a diversification play, a Regulation S and Rule 144A deal, and a decent yield in this environment."

Turkey in focus

In other trading, Turkey's sovereign curve opened a little bit softer, a market source said.

Better buying was seen for Ankara-based construction company Yuksel Insaat's 2015 notes, which priced Nov. 5 at 98.069 to yield 10%. On Wednesday the notes were seen at 96.50 bid, 97.50 offered.

Better selling was seen for Istanbul-based lender Turkiye Garanti Bankasi AS (GarantiBank)'s 2021 notes. The bonds - which sold at 98.086 to yield 6 3/8% on April 14 - were trading Wednesday at 99.562 bid, 99.862 offered.

"Akbank TAS' 2015s are finally seeing good demand on the Street, having mostly trailed behind," a trader said. "Retail investors were also better buyers of Yasar Holding AS."

He was also keeping an eye on the planned $750 million of notes expected from Istanbul-based lender Finansbank AS via Citigroup, Deutsche Bank, HSBC and Standard Chartered. A roadshow is underway.

"It'll be interesting to see where it gets priced, as mid-range banks are going to be using this deal as the benchmark," he said. "A spread around the mid-300s could potentially be compelling, depending on covenants and how well the roadshow goes."

Abu Dhabi names in demand

Looking at the Middle East, Abu Dhabi National Energy Co. was well supported.

"I think moving out of the 2013 euro notes and 2014 dollar notes makes sense," a trader said.

The euro notes were trading at 101 bid, 102 offered while the dollar notes were seen at 105.37 bid, 105.87 offered.

"The curve is being very aggressively supported, and we witnessed today some demand at the long end," he said. "The front-end might be a little tired here after a 30- to 40-bps move over the week."

Abu Dhabi-based investment vehicle Mubadala saw better selling for its 2021 notes, which traded Wednesday at 101.34 bid, 101.64 after pricing at 99.484 on April 13.

Street demand was seen for International Petroleum Investment Co.'s 2021s.

And Bahrain names got some attention during the session on Wednesday, with Bahrain Mumtalakat Holding seeing retail sellers and the sovereign's 2020s near the 97.37 bid, 97.50 offered level.

"The Bahrain 2014 sukuk is trading with a low 108 handle. It looks OK," the trader said. "There's a solid tone in the region, with offer-side liquidity for the most part patchy. Don't get me started on sukuks, where demand continues to outstrip both supply and inventory."

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