Poland, Fresnillo, Vneshprombank, Edcon, Latam Airlines do deals; EM spreads tighten early

By Christine Van Dusen

Atlanta, Nov. 8 - Poland, Mexico's Fresnillo plc, Russian Foreign Economic Industrial Bank (Vneshprombank), South Africa's Edcon Holdings Ltd. and Chile-based Latam Airlines Group SA priced notes on Friday as a better-than-expected jobs report from the United States sent Treasury yields climbing.

The 10-year Treasury moved up to 2.75% on Friday after the U.S. Labor Department announced that about 204,000 jobs were added during October.

Meanwhile, the Markit iTraxx SovX CEEME ex-EU index spread ended the week at Treasuries plus 228 basis points, 5 bps tighter than Thursday.

Prior to the afternoon release of the economic data, trading was quiet for bonds from Central and emerging Europe, the Middle East and Asia, a London-based analyst said.

"We have seen some buying of Turkish corporates, after buyers of Turkish banks yesterday," she said.

In other trading on Friday, Brazil-based OGX Petroleo e Gas Participacoes SA - the oil producer that recently declared bankruptcy - saw its 8 3/8% notes due 2022 close unchanged at 91/2, a trader said.

Petroleos de Venezuela SA's (PDVSA) bonds were mostly lower on the day, with the 5¼% notes due 2017 falling more than two points to 741/2, while the 5 3/8% notes due 2027 were down a deuce to 561/2.

But the 8½% notes due 2017 managed to put on a little bit, closing at 853/4.

Among Mexican homebuilders, Desarrolladora Homex SAB de CV's 9¾% notes due 2020 were steady at 161/4, and Corporacion GEO SAB de CV's 9¼% notes due 2030 were up a half-point at 16.

Kazakh issuer in focus

One London-based trader was keeping an eye on JSC National Co. Kazakhstan Engineering, which will set out on Monday for a roadshow to market a dollar-denominated issue of notes.

Halyk Finance, UBS and VTB Capital are the joint lead managers and bookrunners for the marketing trip.

"The group is looking to raise a senior unsecured eurobond, which will benefit from a negative pledge, restriction on leverage and asset disposals," she said. "There is a change-of-control put at 101% for anything below 80% state ownership, which is a positive."

The company, which makes special-purpose products for law enforcement agencies in Kazakhstan, as well as oil and gas and rail equipment, is a "small player" with "ambitious" plans, she said.

"It's a debut issuer, with a potentially small deal size and should offer a good concession over [KazMunaiGaz National Co.], which is much bigger and better rated," she said.

Vakifbank private placements

Also getting some attention on Friday was Turkey's Turkiye Vakiflar Bankasi TAO (Vakifbank), which in late-October priced a $500 million issue of 5.149% notes due 2018 at 99.35 to yield mid-swaps plus 370 bps.

The company on Friday reported third-quarter profit that was down 16%, year-over-year, but in line with consensus estimates, the analyst said.

"Having recently issued a five-year $500 million deal, Vakif is more focused on private placements in the short end of the curve," she said. "Next year the bank will monitor opportunities, especially in different currencies, as they are keen to diversify their investor base."

Barclays, Goldman Sachs, HSBC, ING, National Bank of Abu Dhabi and Scotiabank were the bookrunners for the recent Rule 144A and Regulation S deal.

Poland does samurai deal

Poland priced a two-tranche ¥60 billion issue of notes due in five and seven years via bookrunners Daiwa Securities and Nomura Securities, according to an announcement from the sovereign.

The deal included ¥50 billion notes due 2018 that priced at a yield of 0.67% and a spread of mid-swaps plus 28 bps.

The second tranche totaled ¥10 billion notes due Nov. 15, 2020 that priced at a yield of 0.91% and a spread of mid-swaps plus 38 bps.

New issue from Edcon

South African retailer Edcon Holdings on Friday launched and priced an upsized €425 million issue of 51/2-year senior notes at par to yield 13 3/8% on, according to a market source.

The deal - upsized from €400 million - printed at the tight end of yield talk, set in the 13½% area.

Joint global coordinator JPMorgan will bill and deliver. BofA Merrill Lynch was also a joint global coordinator. Barclays, Goldman Sachs and Morgan Stanley were joint bookrunners.

The proceeds will be used to refinance the senior notes maturing in 2015.

Fresnillo sells notes

In its new deal, Mexican mining company Fresnillo priced an $800 million issue of 5½% notes due 2023 at 99.242 to yield Treasuries plus 300 bps, according to a company announcement and a syndicate source.

The notes were talked at a spread in the Treasuries plus 325 bps area.

Citigroup, Deutsche Bank and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for funding current investment and development plans, for future growth opportunities and for general corporate purposes.

The issuer is a precious metals mining company based in Mexico City.

Latam Airlines prints deal

Chile-based Latam Airlines Group printed $450 million 6% notes due 2020 at par to yield 6%, a market source said.

The notes were talked at a yield in the 6¼% area.

BofA Merrill Lynch and Citigroup are the bookrunners for the deal.

The notes were issued by Guanay Finance Ltd., a special purpose vehicle.

Vneshprombank prices bonds

Also on Friday, Russia's Vneshprombank priced $200 million 9% notes due 2016 at par to yield 9%, a market source said.

The notes were talked in the 9% area.

Otkritie Bank and Raiffeisen Bank International were the bookrunners for the Regulation S deal.

The notes were issued by VPB Funding.

Vivacom roadshow ahead

Bulgarian telecom Vivacom plans to conduct a roadshow for its €400 million offering of five-year senior secured notes during the Nov. 11 week, according to market sources.

Credit Suisse and VTB Capital are the global coordinators. Barclays and Deutsche Bank are the joint bookrunners. SG CIB is the co-manager.

The Rule 144A and Regulation S for life notes come with two years of call protection.

The Sofia, Bulgaria-based company plans to use the proceeds to refinance debt.

Market sources also were whispering on Friday about a possible upcoming issue of notes from Slovakia.

Dalian Wanda postpones

China's Dalian Wanda Commercial Properties Ltd. has postponed its planned issue of dollar-denominated notes, a market source said.

Barclays, BofA Merrill Lynch, Goldman Sachs, HSBC and UBS were the bookrunners for the Regulation S deal.

A roadshow began Nov. 1.

The company is a real estate and hospitality conglomerate based in Dalian, China.

Stephanie N. Rotondo and Paul A. Harris contributed to this article.

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