Brasil Foods, Evergrande price notes; Vietnam sets price talk for $1 billion; market weakens

By Paul A. Harris

St. Louis, Jan. 21 - Against the backdrop of a massive sell-off in stocks, with the Dow Jones Industrial Average falling more than 2%, emerging markets dropped by ½% on Thursday, according to a money manager based on the U.S. West Coast.

Heading into the New York close the EMBI-Plus was trading at a spread of 297 bps bid, 10 bps wider on the day.

Likewise, the European market was down across the board on Thursday, according to a trader, who spoke heading into the close there.

Near the close of the European session, Brazil five-year credit default swaps were 129 bps mid, 2.5 bps wider on the day.

Russia five-year CDS were 169.5 bps mid, 3.5 bps wider.

Mexico five-year CDS were 134 mid, 2 bps wider.

Evergrande upsizes

In Thursday's primary market Evergrande Real Estate Group, Ltd. priced an upsized $750 million issue of five-year guaranteed senior secured fixed-rate notes (B1/BB-/BB+) at par to yield 13%.

The yield printed on top of the price talk.

Bank of America Merrill Lynch, Goldman Sachs & Co. (Asia) and BOC International were joint bookrunners for the deal, which came into the market sized at $500 million minimum.

The Guangzhou, China-based property company will use the proceeds to repay a structured secured loan, to finance existing and new property projects and for general corporate purposes.

Brasil Foods upsizes, prices

Elsewhere Brasil Foods SA priced an upsized $750 million issue of 7¼% 10-year notes (Ba1/BB+) at 99.127 to yield 7 3/8% on Thursday.

The yield priced 12.5 bps through the 7 5/8% area price talk.

Itau, JPMorgan and Santander ran the books for the issue, which was upsized from $500 million.

The Sao Paulo-based food company will use the proceeds to refinance debt and for general corporate purposes.

Vietnam talks $1 billion

Meanwhile the market heard expected yields on several deals that are expected to price Friday or early in the week ahead.

The Government of the Socialist Republic of Vietnam (Ba3/BB) has talked its $1 billion offering of 10-year global bonds at the 7% area, a market source said on Thursday.

The deal is expected to price Friday or early in the week ahead.

Barclays Capital, Citigroup and Deutsche Bank are the bookrunners.

Listrindo Capital BV and PT Cikarang Listrindo talked their $300 million offering of five-year senior unsecured notes (Ba2) at the 9¾% area.

That deal is expected to price on Friday.

Credit Suisse and Barclays Capital are joint bookrunners.

And Brazil's Minerva Overseas II Ltd. talked its $250 million offering of 10-year senior fixed-rate notes (confirmed B3/expected B-/expected B) at the 11½% area on Thursday.

The deal is expected to price on Friday.

Goldman Sachs & Co. and BB Securities are joint bookrunners for the debt refinancing deal.

The order book is likely well above the $250 million size, according to an investor who is watching the deal.

Vanguarda starts Monday

Meanwhile, Vanguarda do Brasil SA will begin a roadshow in Asia on Monday for its $200 million offering of five-year senior unsecured notes (B3/B-/B-).

Morgan Stanley has the books.

Proceeds will be used to refinance short-term debt and to reduce accounts payable.

Vanguarda is a Rio de Janeiro-based producer of soybeans and cotton.

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