Grupo Bimbo, Rizal Commercial Bank price bonds on positive day for EM; Ukraine rebounds

By Christine Van Dusen

Atlanta, Jan. 19 - Mexico's Grupo Bimbo SAB de CV and Philippines-based Rizal Commercial Banking Corp. priced notes on a mostly positive day for emerging markets assets, which saw spreads narrow and even longtime laggards like Ukraine get a boost.

The sovereign's spreads narrowed by 20 basis points in the morning and tightened even further by day's end, a trader said. And Russia remained firm, though demand was more balanced than earlier in the week.

Hungary also snapped 40 bps tighter, he said, and Qatar was seen narrowing by as much as 20 bps while bonds from Dubai continued to trade well.

Abu Dhabi's International Petroleum Investment Co. and Abu Dhabi National Energy Co. were 10 bps to 15 bps tighter. And some demand was noted for Kuwait's Kipco and Burgan Bank.

"We are definitely off the highs as far as cash prices go, however it's still been an impressive day," another trader said. It was "a very solid day, and a painful one for the shorts. With these moves and price actions, many shorts would have thrown in the towel and, dare I say, we should keep seeing the new issues being readied. It was a very active day with flows obviously biased to much better buyers of risk."

In other trading on Thursday, Ras-al Khaimah remained fairly illiquid while Abu Dhabi's sovereign bonds stayed solid.

Looking to Africa, Egypt's bonds performed well.

"Egypt has been having a great run, of late," a trader said. "We managed again to trade GTB Finance and Afrexim today. Granted, the upcoming maturity of the GTB 2012s is boosting the price of the GTB 2016s, but the Afrexim 2016s look like an OK value here."

Namibia was also popular on Thursday while Senegal took a hit in the Street.

Grupo Bimbo, Rizal price

In its new deal, Mexico-based bakery and food company Grupo Bimbo priced $800 million 4½% notes due Jan. 25, 2022 at 99.19 to yield Treasuries plus 270 bps.

BBVA, Citigroup and Santander were the bookrunners for the Rule 144A and Regulation S notes.

Proceeds will be used for debt refinancing and general corporate purposes.

The final book was more than $4.5 billion, a market source said.

And Philippines-based Rizal priced a $200 million issue of notes due Jan. 31, 2017 at par to yield 5¼%, a market source said.

Standard Chartered Bank was the bookrunner for the Regulation S deal, part of the company's $1 billion euro medium-term note program.

Proceeds will be used for general banking and relending purposes.

The final book was $390 million from 54 accounts, according to a company announcement. About 92% of the orders came from Asia and 8% from Europe. Asset managers accounted for 32%, banks 65% and 3% to other investors.

Turkey does deal

These new deals followed the late-Wednesday pricing of Turkey's $1.5 billion issue of 6¼% notes due Sept. 26, 2022, which came to the market at 99.244 to yield 6.35%, or Treasuries plus 445.3 bps.

Barclays Capital, Citigroup and JPMorgan were the bookrunners for the Securities and Exchange Commission-registered deal.

Proceeds will be used for general financing purposes, possibly including the repayment of debt, according to a filing from the sovereign.

The deal attracted between $4.5 billion and $5 billion in orders, with 40% from the United States, 20% from the United Kingdom, 33% from Turkey and 7% from Europe.

Asset managers accounted for 55%, banks 37%, hedge funds 5%, insurance and pension funds 2% and retail 1%.

"It's unusual to see them issue into weakness, but the 25 bps discount ensures a healthy book, and the new 6¼% 22s are up ¾ of a point on the break," a trader said. "Like the South Africa 2024s, it looks like the 100 level will be some resistance. It's impressive to see Turkish banks so firm throughout all this."

Said another trader, "There has been massive interest in the secondary, consistent with the reality that it now trades flat to Nigeria. What's interesting is that even names like Akbank and VEB Bank, which have hinted at issuance, are also performing in line."

NWS sets price talk

On Thursday, Hong Kong-based infrastructure and service conglomerate NWS Holdings Ltd. set price talk for its planned five-year issue of dollar-denominated notes at the Treasuries plus 550 bps area, a market source said.

Deutsche Bank, HSBC, JPMorgan and Standard Chartered are the bookrunners for the Regulation S deal.

And the final book for South Korea-based telecommunications company KT Corp.'s $350 million issue of fixed-rate senior notes due Jan. 20, 2017 was $4.7 billion with 280 accounts involved, a market source said.

The deal priced at 99.892 to yield 3.899% via Goldman Sachs and JPMorgan in a Regulation S deal.

About 76% of the orders came from Asia and 24% from Europe.

Lifestyle deal oversubscribed

Also oversubscribed was the $350 million issue of 5¼% notes due 2017 from Hong Kong's LS Finance (2017) Ltd., a financing vehicle of retail company Lifestyle International Holdings Ltd.

The notes priced at 99.346 to yield 5.401%, or Treasuries plus 460 bps, with Bank of America Merrill Lynch and JPMorgan in a Regulation S deal.

Proceeds will be used for capital expenditures related to new department store projects in China.

The final book was $1 billion with more than 100 accounts involved, with 88% of the orders coming from Asia and 12% from Europe. Fund managers accounted for 48%, private banks 22%, banks 16%, insurers 11% and others 3%.

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