Petrobras does sizable deal; India's NTPC prints bonds; Croatia's Agrokor on roadshow

By Christine Van Dusen

Atlanta, Sept. 24 - Brazil's Petroleo Brasileiro SA (Petrobras) priced a big euro- and sterling-denominated issue of notes on a Monday that was fairly busy for Latin American assets but somewhat weaker for most emerging markets bonds.

Also printing notes on Monday was India-based utility NTPC Ltd.

"All told, a weak morning, but not utter carnage, by any means," a London-based trader said. "The consolidation in the market we saw last week accelerated today into some decent moves on some names. Very few highlights out there today."

Russia's Vimpelcom, for one, moved 15 basis points to 20 bps wider while Croatia widened by 20 bps.

Dubai Electricity and Water Authority's 2020 bonds started the day down at 117, about 20 bps wider on the week, while DPWorld's 2017 bonds were 25 bps wider on the week.

"DPWorld's 2017s really have run out of steam," he said. "Bids are backing off, for the most part, elsewhere."

Lebanon, however, was trading nicely on Monday. The sovereign's bonds tightened 5 bps to 15 bps. Qatar's front end also did well, with demand noted for its 2018 bond.

Meanwhile, spreads for Latin American names were holding fairly well on Monday, widening just slightly, with higher prices and the bulk of volumes focused on recent issues from BTG Pactual, Maestro Peru, Colombia Telecomunicaciones and Grupo Aval, a New York-based trader said.

Bonds from Venezuela and Petroleos de Venezuela SA (PDVSA) outperformed during the session, with the sovereign's 2027s trading up to 88 after Friday's level of 86.50.

"Argentina bonds see some profit-taking after running higher the prior two weeks," another New York-based trader said.

Petrobras sells notes

In its new deal, energy company Petrobras priced a three-tranche issue of €2 billion notes due 2019 and 2023 and £450 million notes due 2029 in a Securities and Exchange Commission-registered deal, a market source said.

The deal included €1.3 billion 3¼% notes due 2019 that priced at 99.398 to yield mid-swaps plus 212.5 bps. The notes were talked at the 215 bps area.

The second tranche, €700 million 4¼% notes due 2023, priced at 98.154 to yield mid-swaps plus 257.5 bps. The notes were talked at a spread in the 260 bps area.

The third tranche consisted of £450 million 5 3/8% notes due 2029 that priced at 97.472 to yield Gilts plus 320 bps. The notes were talked at the 320 bps to 330 bps area.

BB Securities, Citigroup, Deutsche Bank, HSBC, JPMorgan and Santander were the bookrunners for the deal.

"Petrobras managed to get away a three-tranche deal," a trader said. "It's investment-grade, non-dollar paper in a name well known and generally liked. A sound effort."

New deal from NTPC

In another new deal, NTPC priced $500 million 4¾% notes due 2022 at 99.89 to yield 4.764%, or Treasuries plus 305 bps, a market source said.

The notes were talked at a spread of Treasuries plus 305 bps to 310 bps.

Barclays, Citigroup, Deutsche Bank and RBS were the bookrunners for the Regulation S deal.

Agrokor markets notes

Croatia-based consumer food products company Agrokor dd is on a roadshow for a €475 million issue of seven-year notes that will be sold in dollar- and euro-denominated tranches, a market source said.

BNP Paribas, JPMorgan and UCI are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will be held in London and the United States and ends on Sept. 27.

Proceeds will be used to refinance debt.

Bahrain notes 'hit a wall'

In trading on Monday, Bahrain saw its 2022s quoted at 106 bid, 106.50 offered after nearly touching 107 last week.

"They've hit a wall," a trader said.

And International Petroleum Investment Co. (IPIC)'s notes were 5 bps wider on Monday.

"Heavy tone this morning in the Gulf region, with spreads moving out by anywhere from 3 bps to 7 bps," a London-based trader said.

Jafza notes widen

Dubai-based Jebel Ali Free Zone's (Jafza) 2019 notes were 13 bps wider on the week, trading Monday at 107.75 bid, 108.25 offered.

From Africa, Egypt's 2040s were down at 99 early Monday.

"Egypt, I thought, looked tired last week at those lofty heights," a trader said.

Most other names were wider on Monday, with selling pressure noted for Zambia.

Recent issues in focus

Taking a look at recent new issues, the $1 billion 4.63% notes due 2022 that Poland's PKO Finance AB priced at par was holding in well on Monday, trading at par bid, 100 3/8 offered, a trader said.

The $500 million 6¼% notes due 2019 from MOL Hungarian Oil and Gas plc was trading at 99 bid, 99 3/8 offered on Monday.

The $500 million issue of 4.95% notes due 2019 from Novolipetsk Steel (NLMK) was trading Monday at 99¼ bid, 99½ offered after pricing last week at par.

Turkey bonds continue drop

Another recent issue - Turkey's $1.5 billion 2.803% notes due 2018 that priced at par via Citigroup, HSBC and Kuwait Liquidity House - continued its fall, trading Monday at 98.75.

"Textbook deal squeezed in, decent size and not well placed," a trader said. "Still plenty of loose bonds around."

Looking to Ukraine, sovereign bonds were weaker after Friday's levels of 106.50 bid, 107.50 offered on the 2017s. The country's 2020s were seen at 100.75 bid, 101.75 offered, while the 2021s were quoted at 101.75 bid, 102.75 offered.

"Corporate names were generally quiet," said Svitlana Rusakova of Dragon Capital.

On that front, Oschadbank was a standout after Friday's strong showing.

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