JBS sells notes; Turkish bonds tighten; Russian paper narrows despite ratings review

By Christine Van Dusen

Atlanta, March 31 - Brazil's JBS Investments GmbH sold notes on Monday and bonds from Turkey tightened after the sovereign's ruling that Justice and Development Party (AKP) won the national election.

Turkey now awaits clarity on local election results.

"The market has reacted positively to the news," a London-based analyst said. "Prime Minister Erdogan's speech, however, was somewhat aggressive toward his opponents, which will raise concerns that protests may return, especially on the YouTube and Twitter bans."

Erdogan, part of the AKP party, is now more likely to run as the country's first directly elected president, she said.

Looking to Russia, the country's ratings are under review by Moody's Investors Service.

"The move does not come as a surprise," the analyst said. "But we do note that Moody's now expects a contraction in the economy of 1% in fiscal 2014. Standard & Poor's and Fitch both still expect growth."

Still, Russian bonds managed to tighten on Monday morning, she said

"The market feels supported on the final day of the quarter," she said.

From Latin America, most bonds were firm in trading on Monday, a New York-based trader said.

"Spreads are in a few as Treasuries get knocked down again, although the strong buy conviction seen mid-last week is not present now," he said. "But the market is holding."

In other news on Monday, Peru was considering a dollar-denominated issue of eurobonds, Argentina's Yacimientos Petroliferos Fiscales (YPF) set talk and Pakistan mandated bookrunners.

Market sources were also whispering about Perusahaan Gas Negara, which could bring bonds to the market with ANZ, Standard Chartered Bank and JPMorgan.

JBS sells notes

In its new deal, Brazil's JBS Investments priced a $750 million issue of 7¾% notes due 2024 at par to yield 7¼%, a market source said.

The notes were talked at a yield in the 7½% area.

Bradesco BBI, Itau BBA, JPMorgan and Santander were the bookrunners for the Rule 144A and Regulation S deal.

The notes are guaranteed by meat processor JBS SA and subsidiary JBS Hungary Holdings Kft, the holding company of JBS USA LLC.

ALFA outperforms

The 2044 notes from Mexico's ALFA SAB de CV stood out during the session, the New York-based trader said.

"They were cheap, versus other long comparative-type paper," he said. "Petrobras, Vale SA are a few tighter."

Colombia's corporate issuers saw their bonds pull back a bit, he said, on what seemed like some profit-taking after last week's strong performance.

YPF sets talk

Argentina-based petroleum and natural gas company YPF set talk in the low-to-mid-9% area for its upcoming issue of dollar-denominated and benchmark-sized notes due in 10 years, a market source said.

HSBC, Itau BBA and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for investments in fixed assets and working capital.

The notes could price as soon as Tuesday.

Pakistan picks banks

Pakistan has mandated BofA Merrill Lynch, Barclays, Citigroup and Deutsche Bank for its upcoming dollar-denominated issue of benchmark-sized notes, a market source said.

The Rule 144A and Regulation S deal is being marketed on a roadshow from April 2 to April 7.

The deal is expected to price soon after.

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