Odebrecht Offshore brings new issue; Turkey, Russia bonds fall; recent Kipco notes 'in demand'

By Aleesia Forni and Christine Van Dusen

Virginia Beach, Feb. 20 - Brazil's Odebrecht Offshore Drilling Finance Ltd. priced a new deal during Thursday's primary market.

Elsewhere, bonds moved wider in the secondary market.

"EM feels like it's under pressure this morning," a London-based analyst said early during the session.

"The Federal Open Market Committee minutes were generally hawkish, Chinese [manufacturing data] has missed estimates, and Ukraine remains tense."

In response, Turkey's 2045s moved down ¾ point on Thursday morning.

"Russian long end is down a ½ point," she said.

Bonds from Central Europe and emerging Europe fared slightly better, with the 10-year notes from Croatia and Hungary down ¼ point.

"The Middle East is more mixed, seemingly immune to the pressure in other EM sectors," she said.

The $500 million of notes due 2019 recently issued by Kuwait Projects Co. (Kipco) were "very much in demand again" on Thursday.

In primary market action, Odebrecht Offshore Drilling came to market with $580 million of notes on the heels of its roadshow, which finished up on Thursday.

Santander, HSBC and BNP Paribas were the global coordinators. Bradesco BBI, Itau BBA and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

One market source noted that though the "market is craving some supply," another muted session is expected for the emerging markets space on Friday to close out the week.

"Expecting a quieter day tomorrow with many locals out," a trader said.

Odebrecht prices

Brazil's Odebrecht Offshore Drilling Finance priced $580 million of 6 5/8% notes due Oct. 1, 2022 (Baa3/BBB/BBB) at 99.996 to yield 6 5/8% on Thursday, a market source said.

Santander, HSBC and BNP Paribas were the global coordinators. Bradesco BBI, Itau BBA and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

Odebrecht is an engineering, construction, chemical and petrochemical conglomerate based in Salvador da Bahia, Brazil.

Sberbank struggles

Russia-based OAO Sberbank's new $1 billion 5½% notes due 2024 that priced at par struggled in trading on Thursday, a trader said.

"The new Sberbank continues to trade down," she said.

The notes were talked at a yield in the 5 5/8% area.

BofA Merrill Lynch, Credit Suisse, Deutsche Bank and Sberbank CIB were the bookrunners for the notes, issued by SB Capital SA.

Last week the Moscow-based lender postponed the deal due to market volatility.

Kipco on the move

The recent issue of 2019 notes from Kipco - $500 million 4.8% notes that priced at par to yield mid-swaps plus 314.4 bps - continued to move in trading, a London-based trader said.

The notes were spotted on Thursday at 103.0 bid, 103.5 offered.

BNP Paribas, HSBC and JPMorgan were the bookrunners for the Regulation S deal.

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