Egypt’s euro notes do well; Latin America calendar picks up; Saudi’s Aramco deal on tap

By Rebecca Melvin

New York, April 5 – The Arab Republic of Egypt’s newly priced euro notes due 2025 and 2031 were said to have held up well in first-day trading after the sovereign priced €2 billion of the notes tight to initial talk on Thursday, according to a London-based market source.

“Pricing relative to the curve was pretty compelling and pretty attractive. It moved large steps” in yield from early price thoughts and had a strong order book, the source said.

The €750 million 4¾%, six-year notes priced at par and were trading respectably, the source said. Pricing was tightened from initial talk in the 5 1/8% area.

The €1.25 billion 6 3/8%, 12-year notes also priced at par, and pricing was tightened from initial talk for yield in the area of 6 7/8%.

Egypt was last in the market Feb. 19 when it priced $4 billion of notes due 2024, 2029 and 2049. Nevertheless, investor demand was high for the new deal with order books topping €8.6 billion, and the new issue premium to the existing curve large at some 22 basis points.

Latin America’s new issue calendar was fuller than it had been in some time on Friday after encouraging primary action earlier in the week when Mexico priced €2.5 billion in two tranches of seven- and 20-year notes and Telefonica del Peru SAA priced PEN 1.7 billion ($515 million) of 7 3/8% eight-year notes.

On Friday, word emerged that Panama was planning to issue a dollar-denominated benchmark of bonds next week via joint bookrunners Goldman Sachs and Morgan Stanley. Fixed-income investor meeting were scheduled from Friday through April 9.

In addition, three corporate issuers were stepping up to the plate, including Consorcio Transmantaro SA, Alicorp SSA, and Global Bank Corp.

Consorcio Transmantaro has selected banks and scheduled fixed-income investor meetings regarding a planned offering of dollar, 15-year notes (expected rating: Baa3//), according to market sources.

BofA Merrill Lynch and JPMorgan are organizing roadshow meetings that are being held in Lima, Santiago, Los Angeles, New York, Boston and London through April 10.

The proceeds are expected to be used to fund the early redemption of outstanding bank loans and for capital expenditures.

The power transmission company is based in Lima, Peru.

Alicorp is planning to price nuevo sol-denominated, 10-year senior unsecured notes (expected ratingsBa3//BBB), according to market sources.

The proceeds will be used to repay the bridge financing of the recent acquisition of Intradevco for an equity value of $495 million.

Based in Callao, Peru, Alicorp is a consumer goods company with operations in South America.

And Panama’s Global Bank has mandated banks and is holding fixed-income investor meetings regarding its planned medium-term notes (expected rating: //BBB-) expected to price next week, according to market sources.

Citigroup and JPMorgan are joint bookrunners of the notes with Bladex acting as co-manager of the Rule 144A and Regulation S offering.

Meetings ahead of tentative pricing of the notes on April 11 are being held in New York, London and Boston.

The planned issue was announced in conjunction with the launch of a tender offer for the company’s $550 million of 5 1/8% notes due 2019.

Meanwhile, Saudi Arabian Oil Co. (Aramco) was expected to pull the trigger on its mega deal of $10 billion or more in several tranches. The new deal was not expected to crimp the new issue market, a London-based market source said.

“This deal has been up in the air for some time, and I think most have positioned for it. Once this is done and out of the way, the market will be back to normal. Other than the day it actually prices, I don’t think it’s going to make much of a difference,” the source said.

The market didn’t seem to be moving around too much in the past week because it’s been on investors’ radar screen since the beginning of the year, the source said.

“It’s not necessarily going to take a lot of liquidity out of the market. I’ve been hearing about this trade since the start of the year, and I think people have dry powder that they’ve set aside. But of course, it’s going to come down to pricing,” the source said.

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