Morning Commentary: New South Africa tranches edge up on break; Pemex pricing four tranches

By Rebecca Melvin

New York, May 16 – South Africa’s newly priced 2030 notes and 2048 notes edged up slightly to over par in the early going on Wednesday after the sovereign priced $1.4 billion of the 12-year notes and $600 million of the 30-year notes tight to initial talk, according to sources.

The South Africa 5 7/8% notes due 2030 were 100.5 bid, 100.75 offered after the issue priced at 99.992, or a spread of 280.5 basis points over U.S. Treasuries.

The longer-dated 6.3% notes due 2048 were quoted at 100.43 bid, 100.68 offered after the issue priced at 99.991, or a spread over Treasuries of plus 310.1 bps.

Elsewhere in emerging markets debt, Petroleos Mexicanos SAB de CV announced and guided pricing for a multi-tranche offering of four benchmark-sized euro-denominated notes.

The Regulation S-only notes were being sold via joint bookrunners BBVA, Deutsche Bank AG London Branch (billing and delivery), Santander and Societe Generale.

The proceeds will go toward funding the repurchase of notes in a concurrent tender offer.

The Mexico City-based oil and gas company plans to price three fixed-rate tranches and a floating-rate tranche, between 4.5 years and 10.75 years maturity. Combined orders stood at more than €4.5 billion at the time of the guidance update.

The market also got official word that Paraguay’s Banco Regional SA has put on hold its planned offering of new notes and cancelled a concurrent tender offer for its existing 8 1/8% notes due 2019.

The lender had initiated the tender on April 24 and extended it on May 3 for two weeks.

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