Morning Commentary: Credito Real joins primary calendar; Asia deals trickle through

By Rebecca Melvin

New York, Jan. 18 – Riding on a wave of improved sentiment created by two big sovereign deals pricing in the Latin America region this past week, Mexico’s Credito Real SAB de CV Sofom ER announced on Friday that it has selected banks and scheduled fixed-income investor meetings for a planned sale of intermediate duration dollar notes. The deal was seen pricing in the Jan. 21 week subject to market conditions.

The consumer finance company has mandated Barclays, Citigroup, Goldman Sachs and Morgan Stanley to arrange meetings in London, Boston, New York and Los Angeles.

Credito Real also announced a tender offer for up to $313 million of its $625 million outstanding of 7¼% senior notes due 2023.

The deal follows pricing this week of the Republic of Uruguay’s $1.25 billion of 4 3/8% bonds due 2031 at a tighter-than-expected yield spread of 175 basis points over U.S. Treasuries and Mexico’s $2 billion 4½% 10-year notes, pricing at Treasuries plus 185 bps.

Also on the calendar for Latin America is a deal expected in the week ahead for Colombia’s Termocandelaria Power Ltd., which is expected to price around $400 million of U.S. dollar-denominated senior notes.

The improving fortunes of Latin America, which has been virtually shut down since early fall, has increased the likelihood of new deals from Petroleos Mexicanos SAB de CV and for sovereign Brazil, as well as corporate issuers, sources say.

Elsewhere, pricing emerged on a handful of deals for the Asia region.

India’s Bharat Petroleum Corp. Ltd. announced that it priced $500 million three-year senior notes with a 4 3/8% coupon. Proceeds of the Regulation S deal will be used for working capital.

Singapore’s DBS Group Holdings Ltd. priced $100 million of floating-rate notes due 2021 via J.P. Morgan Securities plc as lead manager.

Guangzhou R&F Properties Co. Ltd. was in the market for the second time this month, pricing $300 million of 9 1/8% senior notes due 2022 (//BB-) at 99.633. The property investment and development company priced $500 million of 2021 notes in early January.

Meanwhile, the Middle East and Africa region was “very firm,” with Bahrain showing particular strength again on Friday as the sovereign recoups ahead of several of its issues being added to the JPMorgan emerging markets sovereign bond index on Jan. 31.

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