Chile prints euro deal; scandal doesn’t hurt Petrobras bonds; Kenya to issue bonds

By Christine Van Dusen

Atlanta, Dec. 3 – Chile printed euro- and dollar-denominated notes on a Wednesday that saw Brazilian corporate bonds barely budge on the news that an executive from Petroleo Brasileiro SA was planning to return $100 million to the company and testify against his co-workers as part of a corruption investigation.

“No material move in spreads so far this morning,” a New York-based trader said. “Close to yesterday’s close.”

By the afternoon, Petrobras’ bonds actually managed to tighten about 8 basis points on the day, he said.

Brazil-based Vale SA bonds were mostly unchanged, though buyers did start to emerge for the 2036s and 2039s, he said.

Brazil’s Odebrecht SA, meanwhile, was quiet.

Other Latin American corporate bonds were offered lower with very few bid requests, he said.

Colombia’s Ecopetrol SA managed to bounce, though, amid light buying, he said.

In other trading, bonds from Ukraine entered mid-week lower by about 1½ points, even as the sovereign moved toward a ceasefire with Russia-supporting rebels, said Svitlana Rusakova of Dragon Capital.

“The disastrous performance of [former Soviet nations’] bonds and the history of recurring ‘false positives’ in Ukraine – when any positive development is quickly superseded by something much worse – is leaving sentiment towards Ukraine at extremely pessimistic levels,” she said.

Also hurting the mood, Donbass Fuel & Energy’s (DTEK) 2018s fell without any provocation, she said.

“Liquidation into an illiquid market is the likeliest reason,” she said.

In deal-related news, Kenya is looking to issue Islamic bonds in 2015, a market source said.

No other details were immediately available on Wednesday.

Chile prices euro notes

In its new deal, Chile priced a two-tranche issue of €800 million and $1.06 billion notes due in 2025, a market source said.

The €800 million 1 5/8% notes due Jan. 30, 2024 priced at 98.892 to yield 1.745%, or mid-swaps plus 75 bps.

The notes were talked at a spread in the 75 bps to 80 bps area.

The $1.06 billion 3 1/8% notes due March 2025 priced at 99.466 to yield 3 1.185%, or Treasuries plus 90 bps, following talk in the very low-100 bps area.

The proceeds will be used for general governmental purposes.

Citigroup, HSBC and Santander were the bookrunners for the Securities and Exchange Commission-registered deal.

Lodha Developers postpones

India’s Lodha Developers Private Ltd. is postponing its planned issue of dollar-denominated notes until early 2015, a market source said.

The note were talked in the mid-to-high-10% area.

JPMorgan and BofA Merrill Lynch were the bookrunners for the Regulation S notes, which were to be non-callable for three years.

The real estate developer is based in Mumbai.

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