Primary hosts huge euro deal from Pemex; Russia, Kazakhstan eyed; MAF, Paraguay prep deals

By Christine Van Dusen

Atlanta, Feb. 14 – Petroleos Mexicanos SAB de CV (Pemex) priced a whopping €4.25 billion of notes in three tranches – the biggest euro-denominated deal ever from an emerging markets corporate issuer – on a supportive Tuesday for the asset class.

“Uncertainty prevails in the political spectrum which, ironically, has maintained a supportive backdrop for EM,” a London-based analyst said.

Russia was also in focus after Fitch Ratings said that near-term prospects for retail banks were improving amid a reduction in loan impairments and funding rates.

The comment “may increase the attractiveness of the eurobonds among investors,” according to a report from Schildershoven Finance BV.

Investors were keeping an eye on Kazakhstan after the government announced a plan to support the country’s lenders.

“The Kazakh government plan to support the banking sector should positively affect banks’ eurobonds in general and [JSC Kazkommertsbank] issues in particular, as it will be the main beneficiary of the program,” Schildershoven said. “Funds will be used to increase capital of the central bank’s problem loan fund unit, under government orders to bolster banking sector.”

In trading, sovereign bonds from Turkey saw some activity. The 7½% notes due 2017 that traded Monday at 102.34 bid, 102.54 offered were seen Tuesday at 102.31 bid, 102.52 offered.

The 7% notes due 2020 that traded Monday at 108.73 bid, 109.23 offered traded Tuesday at 108¾ bid, 109¼ offered.

And the 6 5/8% notes due 2045 that traded Monday at 104.17 bid, 104.79 offered traded Tuesday at 104.16 bid, 104.78 offered, a trader said.

Ukraine quiet

Bonds from Ukraine have been mostly quiet so far this week, said Svitlana Rusakova of Dragon Capital (Cyprus) Ltd.

Sovereign prices have been slightly stronger as a result of “a couple of firm bids,” she said. “Corporates were rather illiquid.”

Saudi Arabia sees activity

Looking to Saudi Arabia, the sovereign’s 2 3/8% notes due in 2021 that traded Monday at 98.22 bid, 98.27 offered moved to 98¼ bid, 98.35 offered on Tuesday.

The 3¼% 2026 notes that traded Monday at 96.13 bid, 96.38 offered traded on Tuesday at 96¼ bid, 96½ offered.

And the 4½% notes due 2046 that traded Monday at 97.80 bid, 98 offered were seen at 97.87 bid, 98.12 offered on Tuesday.

Pemex sells three tranches

In its historic deal, Mexico’s Pemex priced €4.25 billion notes due in 2021, 2024 and 2028, a syndicate source said.

The €1.75 billion 2½% notes due Aug. 21, 2021 priced at 99.957 to yield 2.512%.

The €1.25 billion 3¾% notes due Feb. 21, 2024 priced at 99.463 to yield 3.839%.

And the €1.25 billion 4 7/8% notes due Feb. 21, 2028 priced at 99.135 to yield 4.979%.

BNP Paribas, Credit Agricole CIB, Deutsche Bank and HSBC were the bookrunners for the deal.

Pemex is a petroleum company based in Mexico City.

Ronshine gives guidance

In other deal-related news, Ronshine China Holdings Ltd. set talk in the 8 1/8% area for a tap of its dollar-denominated 6.95% senior notes due 2019, a market source said.

The original issue of $175 million priced at 98.547 to yield 7½%.

UBS, Haitong International, Guotai Junan International, AMTD, SPDB International, Orient Securities (Hong Kong) and China Industrial Securities International are the joint lead managers and joint bookrunners for the Regulation S offering.

The proceeds will be used for general corporate purposes.

Ronshine is a property developer based in Fuzhou, China.

MAF mandates banks

Dubai’s Majid Al Futtaim Holding LLC has mandated HSBC, Standard Chartered and National Bank of Abu Dhabi as bookrunners for a benchmark-sized issue of dollar-denominated perpetual bonds, a market source said.

The notes are expected to price during the first half of the year, depending on market conditions.

The company is a Dubai-based conglomerate.

Paraguay plans issuance

Paraguay is looking to issue $550 million of notes in March, a market source said.

The proceeds will be used to refinance debt and for infrastructure projects.

Other details were not immediately available on Tuesday.

Road King draws orders

The new issue of notes from China’s Road King Infrastructure Ltd. – $300 million of perpetual notes that priced at par on Monday to yield 7.95% drew an order book of more than $5.5 billion, a market source said.

JPMorgan, HSBC and DBS were the joint global coordinators, joint bookrunners and joint lead managers for the Regulation S deal.

The proceeds will be used for general corporate purposes.

Road King is a Hong Kong-based toll road and property company.

© 2015 Prospect News.
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