FirstRand, PTTEP, Inkia print notes on mixed day for EM; Middle East names remain active

By Christine Van Dusen

Atlanta, March 29 - On a mixed Tuesday for emerging markets assets - with risk appetite dipping slightly on continuing turmoil in the Middle East and Japan - South Africa's FirstRand Bank, PTT Exploration and Production Canada and Peru's Inkia Energy Ltd. sold notes.

"Ongoing concerns about radiation levels in Japan and the Libyan conflict continue to weigh on investor sentiment but have provided little impetus for significant price action," according to a report from RBC Capital Markets.

The JPMorgan Emerging Markets Bond Index Plus spread started the day unchanged, at Treasuries plus 260 basis points.

"It was another lacklustre session, although the market is going out slightly tighter," a London-based trader said.

PTTEP, FirstRand sell notes

In its new deal, PTTEP Canada - part of PTT Exploration and Production PCL, a Bangkok-based petroleum exploration and production company - sold $700 million notes due April 5, 2021 at par to yield 5.692%, or Treasuries plus 225 bps, a market source said.

The notes priced at the tight end of talk, which was set at the Treasuries plus 235 bps area.

Barclays Capital was the bookrunner for the Rule 144A and Regulation S transaction.

Tuesday also saw South Africa-based lender FirstRand Bank Ltd. price £30.5 million floating-rate notes due March 29, 2021 at 84, according to a company filing.

FirstRand Bank Ltd. (London branch) was the bookrunner for the Regulation S transaction.

Inkia prints bonds

Also on Tuesday, Peru-based Inkia Energy, a subsidiary of Israel Corp., sold $300 million 8 3/8% notes due April 4, 2021 at 99.169 to yield Treasuries plus 362.5 bps, a market source said.

Merrill Lynch and Credit Suisse were the bookrunners for the Rule 144A and Regulation S notes, which include a change-of-control put at 101%.

"They're not ripping the new Inkia off the secondary screens," a New York-based trader said at day's end. "That's trading up approximately 5/8 from issuance."

And Mexico-based building materials supplier Cemex SAB de CV launched an $800 million offering of senior secured notes due September 2015 at Treasuries plus 525 bps, a market source said.

Merrill Lynch, JPMorgan and RBS Securities are the bookrunners for the notes, which include a change-of-control put at 101% and a par call beginning in June 2015.

Proceeds will be used to repay debt under the company's financing agreement.

"The lack of a meaningful new issue calendar continues to the dismay of many corporates who were fixing to line up deals on the back end of the first quarter," the New York trader said. "They look unlikely to issue on the front end of the second quarter as well."

Corporates plan deals

In other deal-related news, Russia-based commercial lender OAO Promsvyazbank announced plans for a $500 million offering of notes that is expected to come to market in June.

Development Bank of Kazakhstan plans to issue $800 million bonds as soon as July, a market source said.

And Indonesia-based cocoa producer PT Uniflora Prima has tapped ING as the bookrunner for a five-year offering of dollar-denominated notes, a market source said.

The Rule 144A and Regulation S transaction is expected to be launched following a roadshow in Asia, the United States and Europe.

The marketing trip will begin Thursday in Hong Kong and then travel to Singapore, Los Angeles, Boston and New York before concluding April 7 in London.

Chinese issuers on tap

Tuesday also saw China-based milk and milk products manufacturer and marketer Global Dairy Holdings Ltd. planning a renminbi-denominated issue of notes, a market source said.

Merrill Lynch and Macquarie Group are the bookrunners.

Proceeds will be for general corporate purposes and to finance the company's vertical integration plan.

Also from China, monosodium glutamate and xantham gum producer Fufeng Group Ltd. has mandated Citigroup and Deutsche Bank as the bookrunners for a dollar-denominated issue of five-year notes, a market source said.

A roadshow for the Rule 144A and Regulation S notes - which will be non-callable for three years - began Tuesday.

Roadshow ahead for Navios

In another upcoming deal, Greece-based port logistics concern Navios South American Logistics Inc. - which has operations in South America - will commence investor roadshows on Thursday for its $185 million offering of eight-year senior notes, according to an informed source.

The Rule 144A with registration rights deal, which be marketed to both high-yield and emerging markets accounts, is expected to price on April 5 or April 6.

Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners.

Citigroup Global Markets Inc. is the senior co-manager. Credit Suisse and Goldman Advisors are the co-managers.

The notes will become callable in three years at par plus 75% of the coupon. They feature a 101% poison put. Proceeds will be used to repay debt, to purchase barges and pushboats and for general corporate purposes.

The notes, which will be issued by the company in conjunction with special-purpose vehicle Navios Logistics Finance (US) Inc., are expected to garner single B credit ratings.

Shinhan in demand

The final book for South Korea-based Shinhan Bank's $500 million 4 1/8% notes due 2016 - which came to market Monday at 99.412 to yield 4.246%, or Treasuries plus 205 bps - was $3 billion with 196 accounts involved, a market source said.

Merrill Lynch, BNP Paribas, HSBC, ING, JPMorgan, Mizuho, RBS and Shinhan were the bookrunners for the Rule 144A and Regulation S deal, which priced tighter than talk.

About 54% of the orders came from the United States, 38% from Asia and 8% from Europe. Fund managers accounted for 53%, banks 16%, hedge funds 10%, insurers 9%, government agencies 8% and others 4%.

Qatar banks trade up

In trading on Tuesday, Qatar's banks continued to be well bid, particularly Commercial Bank of Qatar.

"That's a bond we always like in a sell-off," a trader said. "It is up nearly 2 points versus the low prints."

The Qatar sovereign was stable, with spreads 15 bps to 20 bps tighter over the week.

"Qatar Islamic Bank remains just about the tightest MENA bank, although it has reached a level where it seems there is some paper for sale," he said. "At this spread, the upside seems a little limited."

Qatar National Bank "has rebounded nicely," he said. "And given the majority government ownership and its dominant market share, it remains a solid, defensive name."

Dubai 'impressive'

Also from the Middle East, Dubai continued to post solid performance. "The week-on-week moves are impressive," the trader said. "Five-year credit default swaps have broken through the key 400 level and are now at 380 bps bid, 395 bps offered."

Emaar Properties' 2016 notes were seen trading at 100.12 bid, 100.62 offered. The notes came to the market in January at par.

"Abu Dhabi's corporates, sovereigns and quasi-sovereigns opened unchanged to slightly tighter," he said. "Egpyt's '20s continue to tick along, last up at 97.50."

Those notes were later seen trading at 97 bid, 98 offered.

IPIC well offered

Abu Dhabi-based oil investment entity International Petroleum Investment Co. was also on the market's mind on Tuesday.

The trader speculated the issuer's recent sterling- and euro-denominated notes due 2016, 2021 and 2026 could struggle due to the expected supply coming from another Abu Dhabi-based investment vehicle, Mubadala Development Co. PJSC.

That company has planned a roadshow with Barclays Capital, HSBC, HSBC, National Bank of Abu Dhabi, Societe Generale and Standard Chartered.

On Tuesday, "the IPIC paper was pretty well offered across the board," he said.

Mriya sees sellers

The trader was also keeping an eye on the $250 million 10½% notes due 2016 that Ukraine-based agriculture producer and trader Mriya Agro Holding plc priced on Friday at 98.876 to yield 11¼%.

Merrill Lynch, RBS and UBS were the bookrunners for the Rule 144A and Regulation S notes.

"There's been more selling today, which sends it back down to the lows of 98.50," he said.

The notes were later seen trading at 98.30 bid, 98.80 offered.

"Avangard is also weaker in sympathy, but then again so is the sovereign, with the long end weaker," the trader said.

Belarus firms

Belarus was back in the headlines on Tuesday, this time after the sovereign devalued its currency by less than expected.

"Market reaction is a combination of confusion and indifference, with prices simply ¼ point firmer," a London-based market source said.

South Africa was also on radar screens on Tuesday.

"The dollar '41s have really started to move now," he said. "They're 30 bps tighter on the week as investors get more comfortable with the 30-year sector."

Gabon, meanwhile, was feeling squeezed, he said. "The dollar '17s are now 116 bid."

Paul A. Harris contributed to this story

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