Hungary’s MOL brings new deal to primary; U.S. economic data, ECB comments drag oil down

By Christine Van Dusen

Atlanta, April 21 – Hungary’s MOL Group sold notes on a difficult day for emerging markets assets, with spreads widening and cash prices dropping as oil prices declined on employment data.

Oil fell after the European Central Bank said interest rates would remain at their current level. Also impacting prices was the U.S. Labor Department’s report that jobless claims fell to a 43-year low, which could translate into a sooner-than-expected interest rate hike.

“A bit of a rough-go today for global financial assets, with everything sold across the board,” a trader said. “EM credit was not spared.”

Brazil’s five-year credit default swaps spreads closed at 353 basis points from 336 bps, while Mexico’s moved to 160 bps from 149 bps.

“Cash prices initially attempted to shrug off spread widening and U.S. Treasury weakness earlier on, but this became too much, and sellers began overwhelming the market,” he said.

High-yield names from Latin America, however, were surprisingly firm, he said.

PDVSA’s 2017s closed almost unchanged at 54.75, Venezuela’s 2027s ticked down to 40.50 from 40.75, and Argentina’s Bonar 2024s finished the day at 113.25 from 112.25.

“Volumes picked up today, with early-morning buyers turning into sellers by midday,” the trader said. “Markets taking a breather is most likely a positive development, as we have had solid run. The question is whether this is part of a consolidation and move higher, or if we now move back the other way.”

Market sources were also whispering about a possible issue of dollar bonds from Oman via Citigroup, JPMorgan, MUFG Securities, Natixis Securities and National Bank of Abu Dhabi.

Lebanon trades up

In other trading, Lebanon’s new two-tranche issue of $1 billion notes due April 22, 2024 and 2031 traded up on Thursday, a trader said.

The $700 million 6.65% notes due 2024 that priced at par to yield 6.65%, following talk in the 6.65% area, traded at 100.2 bid, 100½ offered.

The $300 million 7% 15-year notes priced at par to yield 7%, following talk in the 7.05% area. This tranche was also spotted in the secondary at 100.2 bid, 100½ offered.

Blom Bank, Byblos Bank and Deutsche Bank were the bookrunners for the Regulation S deal.

MOL Group sells bonds

In its new deal, Hungary’s MOL Group priced a €750 million issue of 2 5/8% notes due April 28, 2023 at a yield of 2¾%, a market source said.

BofA Merrill Lynch, Citigroup, Societe Generale CIB and UniCredit were the bookrunners for the Regulation S deal.

The issuer is a Budapest-based oil and gas company.

Hong Kong Electric sets talk

Hong Kong Electric Holdings Ltd. set talk in the Treasuries plus 115 bps area for a dollar-denominated issue of benchmark-sized notes due in 10 years (expected rating: /A-/), a market source said.

BofA Merrill Lynch, BNP Paribas, HSBC, Mizuho Securities and HSBC are the bookrunners for the Regulation S deal.

The proceeds will be used for general corporate purposes.

The issuer is an energy company.

Malaysia attracts orders

Malaysia’s new $1.5 billion issue of two-tranche notes due April 27, 2026 and 2046 drew a final order book of more than $6.3 billion, a market source said.

The deal included $1 billion 3.179% notes due 2026 that priced at par to yield 3.179%, or Treasuries plus 135 bps.

The notes attracted $3.9 billion of orders.

The $500 million 4.08% notes due 2046 priced at par to yield 4.08%, or Treasuries plus 145 bps.

The tranche received $2.4 billion of orders.

VimpelCom does deal

On Wednesday, Russia’s VimpelCom Holdings BV – via GTH Finance BV – priced a two-tranche issue of $1.2 billion notes due April 26, 2020 and March 26, 2023, a market source said.

The $500 million 6¼% notes due 2020 priced at par to yield 6¼%, or Treasuries plus 506.6 bps.

The $700 million 7¼% notes due 2023 priced at par to yield 7¼%, or Treasuries plus 567.7 bps.

Citigroup, Barclays and ING were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay a shareholder loan.

VimpelCom is an Amsterdam-based telecommunications services provider. Its broadband services are offered in Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Armenia, Georgia, Kyrgyzstan, Vietnam, Cambodia, Laos, Algeria, Bangladesh, Pakistan, Burundi, Zimbabwe, Central African Republic, Italy and Canada.

Costa Rican bank sells notes

Also on Wednesday, Banco Nacional de Costa Rica priced $500 million 5 7/8% notes due April 25, 2021 at 99.68 to yield Treasuries plus 463 bps, a market source said.

BofA Merrill Lynch and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund eligible green projects.

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