Pacific Rubiales in focus; roadshows for Malaysia, Formosa; Kuwait bank, Hikma trade higher

By Christine Van Dusen

Atlanta, April 7 – Investors were paying attention on Tuesday to Latin America-focused Pacific Rubiales Energy Corp. – which announced details for its upcoming investor meetings – and perpetual bonds from the Middle East.

Pacific Rubiales’ roadshow will begin in London on Wednesday and then travel to Switzerland, New York, Boston, Santiago and Los Angeles before concluding on May 6 in Miami.

BofA Merrill Lynch, Citigroup and HSBC are arranging the trip.

“Expecting to see buyers, with oil up on the day,” a London-based trader said of Pacific Rubiales’ bonds. “The most active bonds today are the 2019s and 2021s, the underperformers yesterday, but prices are mostly unchanged.”

From the Middle East, bonds were fairly busy in trading on Tuesday, with spreads performing, a London-based trader said.

“Active day, spreads tighter,” he said.

Demand was seen for Ras al-Khaimah’s 2025s between 99.80 and par, with the bonds closing at 99.90 on the bid side, about 6 basis points tighter on the session.

“Majid al Futtaim Holding was popular again,” he said. “Their perpetuals were up to a 108 handle and the 2024 dollar notes were tighter by 8 bps on the week.”

In other news, Malaysia was on a roadshow to market an issue of Islamic bonds, a market source said.

CIMB, HSBC and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow began Tuesday in Kuala Lumpur and will travel to Singapore, Hong Kong, Abu Dhabi, Dubai and London before concluding on April 13 in New York.

Perpetuals in demand

Other perpetuals were in demand, the London trader said, pointing to the new $700 million issue of 5¾% notes that National Bank of Kuwait priced at par to yield Treasuries plus 411.9 bps.

The deal’s final book was $1.4 billion from 110 orders. About 43% of the orders came from the Middle East, 21% from the United Kingdom, 19% from Europe, 15% from Asia and 2% from the offshore United States.

Banks and private banks picked up 40%, fund managers 38% and insurers and pension funds 22%.

The notes came to yield Treasuries plus 411.9 bps via HSBC, Standard Chartered Bank, Citigroup, National Bank of Abu Dhabi and NBK Capital in a Regulation S deal.

“NBK is now 101 bid,” a trader said.

Lat-Am volumes grow

Taking a closer look at Latin America, volumes and inquiries picked up substantially amid the firm tone, a New York-based trader said.

Flows were mixed, he said, and better buyers were seen for Brazil-based Petroleo Brasileiro SA (Petrobras), he said.

Petrobras’ curve tightened a few basis points, he said.

Brazil-based Vale SA tightened as well, with the 2020 and 2022 paper 15 bps narrower on the day, he said.

Braskem, Chile well-bid

Brazil-based Braskem SA was better-bid on Tuesday, he said, coming back strongly after a recent downturn, the New York trader said.

High-grade paper from Chile was also well-bid, led by Cencosud SA, he said.

Colombian high-grade and bank bonds were better-bid too, he said, while Mexican high-grade notes were mostly quiet.

Hikma trades up

Some of the higher-yielding bonds from the Middle East caught a bid, a trader said.

The new issue from Jordan’s Hikma Pharmaceuticals plc – $500 million 4¼% notes due in 2020 that priced at 99.471 to yield mid-swaps plus 287.5 bps – traded Tuesday at 101½, he said.

The deal drew about $1.2 billion of orders from 105 investors, a market source said.

Citigroup, Barclays, HSBC and National Bank of Abu Dhabi were the bookrunners for the Regulation S deal.

About 38% of the orders came from Europe, 30% from the United Kingdom, 24% from the Middle East, 5% from the offshore United States and 3% from Asia.

Fund managers accounted for 70%, banks and private banks 25% and insurers and pension funds 5%.

The proceeds will be used to refinance debt and for general corporate purposes.

Formosa marketing notes

Taiwan’s Formosa Plastics Group has mandated Bank of China, HSBC, ANZ and Mizuho Securities to lead a roadshow for an issue of dollar-denominated notes, a market source said.

The roadshow began on Tuesday.

A Regulation S deal is expected to follow.

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