EM-focused EP Energy prints notes; Russian corporates mixed; Chile's Metro notes trade higher

By Christine Van Dusen

Atlanta, Jan. 31 - Emerging markets-focused EP Energy Corp. sold notes on a Friday that saw bonds from Turkey and Russia strengthen while spreads for Latin American corporates widened.

"Once again we have seen emerging markets central banks moving to defend their currency with yesterday's pledge by the Russian Central Bank for 'unlimited' intervention to protect the ruble, which strengthened circa 1.4% versus the dollar from its morning low," a London-based analyst said.

Activity was mixed for Russian corporates like Evraz Group and Vimpelcom, she said.

Looking to Latin America, most corporate bonds traded about 10 basis points wider on Friday, a New York-based trader said.

"High-grade, price-based credits are anywhere from a half-point to quarter-point lower, and liquidity is almost nil," he said.

Names like Brazil's Braskem SA and Gerdau SA were lower by at least a half-point, he said.

Bucking the trend was Chile-based Empresa de Transporte de Pasajeros Metro SA's (Metro de Santiago) new $500 million 4¾% notes due 2024 that priced at 99.246.

"Trading well at 100.35 bid on Friday afternoon," the New York trader said.

The notes priced to yield 4.846%, or Treasuries plus 210 bps, via BBVA and Deutsche Bank in a Rule 144A and Regulation S deal.

The proceeds will be used to fund capital expenditures and for general corporate purposes.

The final book approached $4 billion, a market source said.

Investors remained somewhat interested in the new deal from Kuwait Projects Co. (Kipco), a $500 million issue of 4.8% notes due 2019 that priced at par.

The new notes were trading about 5/8-point above re-offer on Friday morning, a trader said.

The notes came to the market at a spread of mid-swaps plus 314.4 bps via BNP Paribas, HSBC and JPMorgan in a Regulation S deal.

From Wednesday afternoon to Thursday morning the notes were trading between 99.80 and 1001/4, another trader said.

Ukraine battered

In other trading, bonds from Ukraine entered the end of the week off by as much as 3½ points, said Svitlana Rusakova of Dragon Capital.

"With distressed emerging markets, S&P's downgrade of Ukraine a day earlier and the potentially confrontational local amnesty bill, Ukraine 2017 to 2023s were off," she said. "However, sentiment improved soon, with prices bouncing."

And sellers were scarce in the corporate space, she said.

EP Energy prices notes

In its new deal, emerging markets-focused EP Energy priced €500 million 7% notes due 2021 at par to yield 7%, a market source said.

The notes were talked at a yield in the 7% area.

JPMorgan, Citigroup, Societe Generale, RBS and UniCredit were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for refinancing, share buybacks and fees and expenses.

EP Energy is a Houston-based oil and natural gas exploration and production company with businesses in Germany, the Czech Republic and Slovakia.

Minsur launches dollar deal

Peru's Minsur SA launched its $450 million issue of 10-year notes (Baa3/BBB-/BBB-) at a yield of 6½%, a syndicate source said.

The notes were talked in the mid-to-high-6% area.

Scotiabank, BofA Merrill Lynch and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for debt repayment and for general corporate purposes.

Minsur is a mining company based in Lima.

Comcel sells bonds

On Thursday, Guatemala's Comunicaciones Celulares SA (Comcel) priced $800 million 6 7/8% notes due 2024 at 98.233, a market source said.

The notes were talked at the 7¼% area.

Credit Suisse, Citigroup and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay outstanding debt and a dividend to shareholders.

The issuer is based in Santa Catarina Pinula, Guatemala.

"The new issue is performing well; the Comcel 2024s are up one point," the New York-based trader said.

Puma draws orders

Also drawing a significant order book was Singapore's Puma Energy Holdings Pte. Ltd. and its $750 million issue of seven-year senior notes that priced at par.

About 120 investors got in on the deal, brought to the market by joint global coordinators Goldman Sachs International and SG CIB. ING, Natixis, RMB and Standard Bank were joint bookrunners.

Proceeds will be used to refinance debt and fund development.

The Singapore-based midstream and downstream oil group has refined petroleum products supply, storage and distribution operations in Central America, the Caribbean, Africa and Australia.

PDVSA trades actively

Participants in the distressed-debt market saw brisk activity Friday in the bonds of Venezuela's state-run oil company, Petroleos de Venezuela SA. PDVSA meantime announced plans for some foreign fuel purchases to offset unscheduled downtime at one of its plants.

A trader opined that "in distressed-land, PDVSA is usually the most active - and that's the case today."

He saw busy trading in the Venezuelan oil company's 6% notes due 2026, seeing those bonds trading off almost 2 points to 51 3/8 bid.

He also saw its 9¾% bonds due 2035 down more than 2 points, on over a dozen round-lot trades, ending at 61 3/8 bid.

Caracas-based PDVSA announced Friday that it plans to buy some 300,000 barrels of unleaded 95-octane gas in the open market, for delivery on Feb. 1 and Feb. 10.

The company is trying to compensate for some unscheduled downtime at one of its petroleum refining plants, but it has not yet found a supplier who can meet its conditions.

Paul Deckelman contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.