New issue from YPF; EM continues to climb; buyers lead way, though some sellers are seen

By Christine Van Dusen

Atlanta, March 18 – Argentina’s Yacimientos Petroliferos Fiscales SA (YPF) printed notes on Friday as emerging markets assets continued to enjoy a strong tone.

“We did move higher today on most credits,” a New York-based trader said. “Clients didn’t chase today as strongly as other days this week, and we did see more customer sell tickets today, but they are still clearly better buyers.”

Mexico-based Cemex SAB de CV saw more gains after hosting an investor day in New York, with its 2026s moving up one point.

Colombia’s Ecopetrol SA climbed ¾ point to 1 point as oil continued to move higher.

“It’s now up 8 to 10 points in three weeks,” he said.

In other trading, the new issue of notes from Azerbaijan’s Southern Gas Corridor CJSC – $1 billion 6 7/8% notes due 2026 that priced Thursday at 99.112 to yield 7%, or Treasuries plus 509.7 basis points – saw some activity on Friday.

The notes were spotted at 99.90 bid, 100.15 offered.

“Strong open,” a trader said. “The deal size of only $1 billion was less than expected, and 7% was a level versus the sovereign that was more than generous.”

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

The issuer is owned by the Republic of Azerbaijan and represents the country’s interest in the Southern Gas Corridor Project, a cross-border gas value chain.

Later on Friday, the notes moved to 99.59 bid, 99.74 offered.

Looking to Ukraine, sovereign bonds have been rising along with the larger-market rally, but the move has been “rather muted,” said Fyodor Bagnenko, a fixed-income trader with Dragon Capital.

Into the end of the week, there were “few price quotes and flows, except a very strong bid for the 2023s,” he said.

Two-way flows continued for some quasi-sovereigns, he said.

“The same old themes dominated in the corporate universe,” he said.

Shinhan releases book

The final book for South Korea-based Shinhan Bank’s new $500 million 3 7/8% notes due 2026 was more than $3 billion from 228 investors, a market source said.

The notes priced Thursday at 99.361 to yield 3.953%, or Treasuries plus 205 bps, via BofA Merrill Lynch, BNP Paribas, HSBC, JPMorgan, Mizuho Securities and Morgan Stanley in a Rule 144A and Regulation S deal.

Asian investors bought 60%, United States 24% and Europe, the Middle East and Africa 16%.

Asset and fund managers picked up 66% of the orders, banks 11%, private banks and others 3% and insurers, pensions and sovereign wealth funds 20%.

In trading on Friday, the notes were seen at Treasuries plus 195 bps.

YPF sells notes

In its new deal, Argentina’s YPF priced $1 billion 8½% notes due March 23, 2021 at par to yield 8½%, a market source said.

Talk was set in the 8 7/8% area.

Credit Suisse, HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal. The proceeds will be used for capital expenditures and working capital.

YPF is a petroleum and natural gas company based in Buenos Aires.

Yunnan Provincial roadshow

China’s Yunnan Provincial Investment Holdings Group (YIG) will set out on March 21 for a roadshow to market a possible dollar-denominated bond, a market source said.

Bank of China International, China Minsheng International and UBS are the bookrunners for the deal.

The roadshow will end on March 22.

The issuer is a Kunming-based supplier of steel, iron ore, coal, sand and gravel that also works in transportation, construction, technology and other sectors.

IRSA does deal

Late on Thursday, Argentina’s Inversiones y Representaciones SA (IRSA) priced a $300 million issue of 8¾% notes due March 24, 2023 at 98.722 to yield 9%, a market source said.

The notes were talked at a yield in the low-to-mid-9% area.

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

The proceeds will be used to repay an intercompany loan, for working capital and for investment in tangible assets in Argentina.

IRSA is a real estate company based in Buenos Aires.

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