New Europe sells notes; Turkish names trade well; Petrobras widens; liquidity thinning out

By Christine Van Dusen

Atlanta, Nov. 24 – New Europe Property Investments plc sold notes on a Tuesday that saw investors showing caution as oil climbed but other commodities remained low and the dollar stayed strong.

Though oil prices climbed as much as 3% on Tuesday after a Russian fighter jet was downed near the border of Syria and Turkey, “oil credits didn’t react much,” a London-based trader said.

Meanwhile, “Turkey banks’ trading is holding well as retail continues to pick away at subordinated debt,” a trader said. “Corporates are also trading well, with strong technicals, as real money looks to top up exposure on any dips.”

Looking to Ukraine, long-dated sovereign bonds so far this week have felt some pressure, said Fyodor Bagnenko, a fixed-income trader with Dragon Capital.

The short end has also weakened but “generally outperformed,” he said.

From Latin America, trading on Tuesday was very quiet and mostly weaker, a New York-based trader said.

“Some credits seem to be meandering close to Friday and Monday levels, while others have dipped lower,” he said.

Brazil-based Petroleo Brasileiro SA moved wider on Tuesday, with few buyers spotted.

High-yield names from Mexico were holding in as Cemex SAB de CV attempted to hold steady and not move lower, he said.

“The market, as a whole, has been feeling vulnerable and not without good reason,” he said. “Recent earnings were mixed at best, the dollar remains strong like a bull, U.S. rates look poised for a increase with today’s U.S. economic numbers toeing the line, it seems.”

Primary dries up

The new issue market in Latin America has dried up, the trader said, with waning customer demand and weaker corporate revenue levels that have led to capital expenditure cuts.

“But yes, there are looming debt maturities too, so that is certainly a quandary,” he said.

Said another trader, “Thanksgiving on Thursday will mark an end of any decent liquidity into the year end.”

New Europe prices bonds

New Europe Property Investments – via subsidiary NE Property Cooperatief UA – sold €400 million 3¾% notes due Feb. 26, 2021 at 99.597, according to a company filing.

Deutsche Bank and JPMorgan were the bookrunners for the Regulation S deal.

The company, based in Isle of Man, has offices in Romania, Slovakia and Serbia.

Macedonia seeks issuance

Macedonia is looking to issue euro-denominated notes, according to filing from the sovereign.

Citigroup is the bookrunner for the Rule 144A and Regulation S deal.

Finansbank plans dollar notes

Turkey’s Turkiye Finans Katilim Bankasi AS is looking to print an issue of dollar-denominated and benchmark-sized notes by the end of first-quarter 2016, a market source said.

The bank is owned by the National Bank of Greece, which is looking to sell its stake. Qatar National Bank is believed to be a potential buyer.

Finansbank is an Istanbul-based lender.

Albaraka prints notes

On Monday, Turkey’s Albaraka Turk Katilim Bankasi AS priced $250 million 10½% notes due in 2025 at par to yield 10½%, matching talk, a market source said.

Standard Chartered Bank, Barwa Bank, Dubai Islamic Bank, Emirates NBD Capital, Nomura International, Noor Bank and QInvest were the bookrunners for the Regulation S deal.

The issuer is an Istanbul-based lender.

“The valuation looks cheap at 10½%,” a trader said. “But technicals seem poor as we are close to year end and the Street will not be looking to hold any risk.”

Real-money investors stayed away from the deal, given its small size, he said.

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