Primary hosts huge Alibaba deal; Israel Chemicals, Protelindo, Elementia also issue notes

By Christine Van Dusen

Atlanta, Nov. 20 – China’s Alibaba Group Holding Ltd. captivated the market by printing a whopping $8 billion issue of notes in six tranches on an otherwise slightly wider Thursday for most emerging markets assets.

Also selling notes on Thursday were Israel Chemicals Ltd., Indonesia’s PT Profesional Telekomunikasi Indonesia Tbk (Protelindo) and Mexico’s Elementia SA de CV.

“[Emerging markets] is generally doing well at keeping up with the Treasury move, with spreads only a fraction wider,” a London-based analyst said.

Said a London-based trader, “Active morning, and then it wound down as the day went on.”

Among the more active issues from the Gulf region on Thursday morning was Dubai Aviation Corp.’s (FlyDubai) $500 million 3.776% notes due Nov. 26, 2019 that priced at par to yield 3.776%, or mid-swaps plus 200 basis points.

“Quite busy,” the trader said.

The notes traded between 99.87 and 100.12 on Thursday but did most of its work near par, he said.

“Plenty of bonds going into that par bid,” he said. “I am seeing some local retail demand, so I presume it will get locked away.”

Credit Agricole CIB, Dubai Islamic Bank, Emirates NBD, HSBC, National Bank of Abu Dhabi, Noor Bank and Standard Chartered Bank were the bookrunners for the Regulation S sukuk issue.

Turkish banks saw buyers in the wake of Wednesday’s news Peru’s BBVA Banco Continental SA is seeking to increase its ownership of Turkey-based GarantiBank International NV (GarantiBank) by purchasing shares from Turkish holding company Dogus Holding AS.

“Russia has stabilized after recent weakness, but liquidity remains generally poor,” the analyst said. “Comments out of Russia have been a little more conciliatory recently.”

But tensions remained high amid word that a Russian spy plane was seen over Latvia on Wednesday, he said.

Dar al Arkan popular

In other trading on Thursday, bonds from Dar al Arkan Holdings were popular, the London trader said.

“They’re 20 bps to 40 bps tighter on the month now,” he said.

Two-way activity was seen for Emirates NBD’s 2019s between par and 100 1/8.

“The Bahrain sovereign caught a little bid from the semi-professional community today,” he said. “Worth noting there’s been some good demand sighted on Lebanon this week.”

Lat-Am in focus

Looking to Latin America, Odebrecht SA hit the lows of the day during the morning, only to bounce back later in the session as investors digested the news of the corporate corruption scandal in Brazil, a New York-based trader said.

Brazil-based Vale SA saw its long-dated bonds widen a few basis points while its short-dated bonds were mostly unchanged.

Alibaba does six-tranche deal

In its huge new deal, China’s Alibaba sold $8 billion notes due in 2017, 2019, 2021, 2024 and 2034 as part of six-tranche issue of fixed- and floating-rate notes, a market source said.

The $1 billion 1 5/8% notes due 2017 priced at a spread of Treasuries plus 70 bps, tighter than talk, set in the 80 bps area.

The $300 million floating-rate notes due 2017 priced at par for a spread of Libor plus 52 bps.

The $2.25 billion 2½% notes due in 2019 priced at a spread of Treasuries plus 95 bps, tighter than talk, set in the 110 bps area.

The $1.5 billion 3 1/8% notes due 2021 priced at Treasuries plus 115 bps, tighter than talk, set in the 135 bps area.

The $2.25 billion 3.6% notes due 2024 came to the market at 128 bps over Treasuries, following talk in the 150 bps area.

The $700 million notes due in 2034 priced at Treasuries plus 148 bps, tighter than talk, set in the 175 bps area.

The company canceled plans for a five-year issue of floating-rate notes.

Citigroup, Deutsche Bank, JPMorgan and Morgan Stanley were the active bookrunners for the Rule 144A and Regulation S deal. Credit Suisse and Goldman Sachs are the passive bookrunners.

Other details were not immediately available on Thursday evening.

Alibaba is an e-commerce group and internet portal based in Hangzhou, China.

Israel Chemicals prices notes

Israel Chemicals priced $800 million 4½% notes due Dec. 2, 2024 at 99.285 to yield 4.59%, according to a company announcement.

Barclays, Citigroup and HSBC were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay certain short-term loans and debt and for general corporate purposes, potential acquisitions and the refinancing of existing debt.

Based in Tel Aviv, the issuer is a fertilizer and specialty chemicals company.

Elementia prints bonds

Mexico’s Elementia sold $425 million notes due in 2024 to yield 5¾%, a market source said.

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

Citigroup, HSBC and Santander were the bookrunners for the Rule 144A and Regulation S deal.

Other details were not immediately available on Thursday.

Elementia is a Mexico City-based manufacturer and distributor of copper, aluminum, fiber cement, concrete polyethylene and styrene products for the industrial, construction and infrastructure sectors in Mexico, the United States and Latin America.

Issuance from Protelindo

Indonesia’s Protelindo priced S$180 million 3¼% notes due Nov. 27, 2024 (/AA/) at par to yield 3¼%, a market source said.

DBS Bank and OCBC were the bookrunners for the Regulation S deal.

Jakarta-based Protelindo builds and operates cellphone towers and is a subsidiary of PT Sarana Menara Nusantara Tbk.

Angamos launches bonds

Chile-based Empresa Electrica Angamos SA launched an $800 million issue of 2029 notes at Treasuries plus 275 bps, a market source said.

The notes were talked at a spread of Treasuries plus high-200 bps to 300 bps.

Citigroup, HSBC, JPMorgan, Itau, Scotia Capital and Sumitomo are the bookrunners for the Rule 144A and Regulation S deal.

The amortizing bond will have a 9.3-year average life, with a 3½-year grace period before amortization begins.

The issuer is a Santiago-based thermal power plant operator and subsidiary of Inversiones Nueva Ventanas SA.

Gruma launches notes

Mexico’s Gruma SA de CV launched $400 million 10-year notes at Treasuries plus 255 bps, a market source said.

Goldman Sachs and Santander are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds from the new issue will be used to redeem the company’s perpetual bonds and to pay debt.

Gruma, based in Monterrey, Mexico, is involved in the production, marketing, distribution, and sale of corn flour, packaged tortillas and wheat flour.

mBank launches notes

Poland’s mBank launched a €500 million seven-year issue of notes (BBB+/A/) at mid-swaps plus 145 bps, a market source said.

Barclays, Commerzbank, Credit Suisse and JPMorgan are the bookrunners for the deal.

The lender is based in Lodz.

FirstRand cancels issuance

South Africa’s FirstRand Bank Ltd. has canceled plans for a dollar-denominated issue of notes due Dec. 2, 2019, a market source said.

Citigroup, Mitsubishi UFG and RMB were the bookrunners for the Regulation S deal, which was initially talked at a spread in the mid-swaps plus 250 bps area.

FirstRand Bank is a wholly owned subsidiary of FirstRand Ltd., a financial services company based in Johannesburg.

Marfrig won’t issue now

Brazil-based food processing company Marfrig Overseas Ltd. announced it has decided not to pursue the offering of a new issue of seven-year senior notes.

According to a press release, the company began price discussions with investors on Friday for the offering, the proceeds of which would be exclusively used to finance a tender offer for its outstanding $775 million of 9½% senior notes due 2020.

On Wednesday, initial price talks were disseminated to the market, and a solid book was built.

However, price levels indicated by investors did not meet Marfrig’s price target, which last offered senior notes at a price below 7% and with a negative new issue premium of 78 bps.

The company also canceled the tender offer and consent solicitation for the 9½% notes, which began Friday and was set to expire on Dec. 12.

NTPC deal oversubscribed

India-based NTPC Ltd.’s new issue of $500 million 4 3/8% notes due Nov. 26, 2024 that priced at 99.711 to yield 4.411% received $2.3 billion of orders, a market source said.

The notes came to the market on Wednesday at Treasuries plus 205 bps via Barclays, Citigroup, Deutsche Bank, HSBC and SBI Capital Markets in a Regulation S deal.

About 68% of the orders came from Asia, 18% from Europe and 14% from the offshore United States.

Fund managers picked up 53%, banks 20%, insurers 15%, official institutions 8% and private banks 4%.

SK E&S releases final book

The new issue of notes from Korea-based SK E&S Co. Ltd. –$300 million 4 7/8% perpetual notes that priced on Wednesday at par – drew a final book of about $750 million, a market source said.

Barclays, Citigroup, Goldman Sachs, JPMorgan and UBS were the bookrunners for the Rule 144A and Regulation S deal.

About 55% of the orders came from Asia, 43% from Europe and 2% from the United States, with 73% from fund managers, 16% from private banks, 9% from banks and 2% from insurers.

SK E&S is a natural gas and electricity company based in Seoul.

Chongqing Yufu prices notes

Also on Wednesday, Chongqing Yufu Assets Operation and Management Co. Ltd. sold RMB 500 million 5 5/8% notes due Nov. 19, 2017 at par to yield 5 5/8%, a market source said.

Deutsche Bank, DBS Bank and HSBC were the bookrunners for the Regulation S deal.

The proceeds will be used for working capital and for general corporate purposes.

The issuer is a city investment vehicle and consulting company.

Toni Weeks contributed to this article.

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