AVIC, Kexim, America Movil, Ematum do deals; Korean issuers tap banks; Argentina performs

By Christine Van Dusen

Atlanta, Sept. 5 - China's AVIC International Holdings Ltd., Export-Import Bank of Korea (Kexim), Mexico's America Movil SAB de CV and Mozambique's Ematum priced new issues on Thursday as investors worried about the upcoming non-farm payrolls report and its likely impact on rates.

"U.S. Treasuries are selling off this morning, reaching 2.925%," a London-based analyst said. "Generally better tone in equity markets this morning, particularly in India after the new Governor of the Central Bank announced less tight regulation for banks."

Bond prices from Central and emerging Europe, the Middle East and Asia moved down and spreads generally tightened, she said.

The Markit iTraxx SovX CEEME ex-EU index spread on Thursday opened at 255 basis points over Treasuries, tighter by 1 bp. The Markit iTraxx Crossover index spread - seen Wednesday at 422 bps - moved in to 413.5 bps on Thursday.

"Activity remains limited as investors await the upcoming U.S. data for clues to the Fed's tapering actions going forward," the analyst said.

Sovereign and quasi-sovereign bonds from Latin America reacted to the Treasury moves with some aplomb, a New York-based trader said.

Argentina, in particular, managed to hold on to some recent gains while bonds from Venezuela and PDVSA closed unchanged or up about ½ point.

"We saw better selling early on today and some buyers reappear mid-afternoon with overall flows balanced," he said.

Meanwhile, several issuers from South Korea got busy lining up potential deals, including Korea Hydro & Nuclear Power Co., GS Caltex Corp. and Woori Bank.

Trading of some bonds 'tricky'

Thursday's session was a bit trickier for bonds from the Middle East and North Africa, a London-based trader said.

"It feels a lot worse than it is, as usual, given this market trades on cash price and not on spread," he said. "Plenty of inquiry and interest in the past two days, but matching up buyers with sellers and then matching up realistic bids and offers is also tricky given their respective diverging views of where the 'real' market is."

DPWorld, others well-offered

DPWorld, Emirates and perpetual notes from the Middle East continued to be well-offered, the London trader said.

The Dubai Islamic Bank perpetuals traded at 921/2, he said.

"The year's high is 103," he said. "Saudi Electricity Co. is nicely lower as well, with the 2022s and 2023s now 30 bps wider on the month."

Dubai issuers in focus

Dubai Electricity and Water Authority experienced some demand on Thursday, with its 2016s about 33 bps tighter on the month, a trader said.

And two-way activity was noted for Dubai's 2043s between 80 and 81.

"Thankfully tomorrow is Friday, so activity should be muted in this space," the London trader said. "It will be interesting to see where we open Monday if we get a strong payroll number."

Lat-Am corporates weaken

Taking another look at Latin America, corporate bonds opened Thursday's session weaker and wider, another New York-based trader said.

Names like Brazil's Vale SA and Chile's Codelco were as much as 6 bps wider.

"Braskem paper, which has held in OK through this downtrade, was hit a few times early, and that curve is now well-offered on the follow," he said.

Bank bonds from Colombia suffered on Thursday, with Bancolombia paper well-offered.

"The Street and clients are very quiet so far, almost as if we are in a vapor lock here," he said. "Liquidity is so poor at this point, it's very difficult to put bids on most paper."

AVIC sells bonds

In its new deal, China-based investment holding company AVIC - through special-purpose vehicle AVIC International Finance & Investment Ltd. - priced a $500 million two-tranche issue of notes due 2018 and 2023.

Bank of China International, RBS, Credit Suisse and HSBC were the bookrunners for the Regulation S deal.

The transaction included $300 million 4¾% notes due 2018 that priced at 99.732 to yield 4.811%, or Treasuries plus 300 bps.

The second tranche of $200 million 6% notes due 2023 priced at par to yield 6%, or Treasuries plus 305.5 bps.

America Movil does another deal

Mexico's America Movil priced a $750 million issue of floating-rate notes due 2016 at par to yield Libor plus 100 bps, a market source said.

The notes were initially talked at a spread of Libor plus the very low-100 bps area.

Citigroup, Banca IMI and BBVA were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes, including the repayment of outstanding Mexican peso-denominated indebtedness.

Earlier this week, the Mexico City-based telecommunications company priced notes due 2073 in two tranches totaling €1.45 billion and one tranche of £550 million with Deutsche Bank, Barclays and BNP Paribas.

Kexim prints notes

Also on Thursday, Korea's Kexim sold A$100 million 5 3/8% notes due 2019 at 99.281 to yield 5.519% via ANZ and HSBC.

And Mozambique government agency Ematum priced $500 million 6.305% notes due 2020 at 92.051 to yield 8½%, a market source said.

BNP Paribas and Credit Suisse were the bookrunners for the Regulation S-only deal.

The proceeds will be used for the development of Mozambique's domestic fishing infrastructure.

Peru to issue bonds

In other deal-related news, Peru is looking to issue benchmark-sized bonds for the purpose of financing infrastructure projects, a market source said.

No other details were immediately available on Thursday.

Meanwhile, corporate bonds from Peru moved lower on the day, a New York-based trader said.

Korean issues ahead

Korea Hydro & Nuclear Power mandated Citigroup, Deutsche Bank, Goldman Sachs and UBS for a roadshow starting Sept. 11 and taking place in Asia, Europe and the United States.

A transaction may follow, subject to market conditions.

And oil refiner GS Caltex tapped BofA Merrill Lynch, Citigroup and Goldman Sachs as bookrunners for a possible issue of notes that will be marketed during a roadshow beginning Sept. 9, a market source said.

Woori Bank taps leads

South Korea's Woori Bank mandated Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan and Standard Chartered Bank for a roadshow starting Sept. 9.

And the final book for South Korea's new $1 billion issue of 3 7/8% notes due 2023 was $5 billion, a market source said.

The SEC-registered notes priced at 98.791 to yield 4.02%, or Treasuries plus 115 bps, with bookrunners Citigroup, Deutsche Bank, Goldman Sachs, HSBC, Korea Development Bank and Woori Investment and Securities.

About 59% of the orders came from Asia, 25% from the U.S. and 16% from Europe.

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