Poland preps deal; Asian paper mostly unchanged; Petrobras tightens; Paraguay plans bonds

By Christine Van Dusen

Atlanta, March 30 – Poland set talk for an issue of euro-denominated notes on Monday as trading of Asian bonds quieted and sellers of Latin American debt outpaced buyers.

Prices for high-grade paper were unchanged, a London-based trader said, while short-dated notes from Chinese property companies saw some demand on rumors that mortgage policies could loosen.

“But the sector closed the day unchanged,” he said.

Paper from Asian financial companies were better offered after five state-owned banks reported that their non-performing loans grew about 35% in 2014, he said.

“Korea and India closed unchanged while momentum in Malaysia remained,” he said.

Still, the curve for Malaysian oil company Petroliam Nasional Bhd. (Petronas) was unchanged.

“Banks are unchanged to 3 basis points tighter,” he said.

And high-yield sovereigns ended the Asian session unchanged to ¼ point higher, with some selling pressure after the London open, he said.

From Latin America, trading was fairly slow and sellers outpaced buyers on a firm but cautious Monday morning, a New York-based trader said.

Brazil-based Petroleo Brasileiro SA saw its bonds tighten slightly, even as the company continued to grapple with a corruption scandal.

“Headlines keep rolling in, none of which have impacted spreads thus far,” he said.

Brazil’s Braskem SA has also been wrapped up in the scandal, but investors seemed to be taking that news in stride, so the curve moved higher on Monday, he said.

Looking to the Middle East, spreads were mixed and flows were moderate on Monday as the market moved into month-end, a London-based trader said.

Middle East in focus

Perpetual bonds from the Middle East were “a little active,” the London trader said.

“For Abu Dhabi Islamic Bank, we traded two-way between 104¼ and 104½,” he said. “Saw some interest in Dubai Islamic Bank and selling of Emirates Islamic Bank.”

Long-dated bonds received support and the recent issue from Ras al-Khaimah was slightly wider and lower than launch, he said.

“It’s interesting that some of the higher yielders are the best performers on the month,” he said. “Granted, they are not the most liquid, but levels are higher.”

Poland gives guidance

Poland set talk at mid-swaps plus 35 bps to 40 bps for a €1 billion issue of 12-year notes, a market source said.

Citigroup is the bookrunner for the Regulation S deal.

And Paraguay is looking to issue bonds by the end of this year or in early 2016, a market source said.

The proceeds will be used for infrastructure improvements.

Other details were not immediately available on Monday.

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