Poland, TAM, Russian Agricultural Bank, others print bonds on active, mixed day for EM

By Christine Van Dusen

Atlanta, May 26 - The Republic of Poland, HSBC Bank Middle East, Brazil's TAM Capital 3 Inc., Brazil's OGX Petroleo e Gas Participacoes SA, Banco Santander Brasil SA, Russia's VTB Capital SA and OJSC Russian Agricultural Bank sold notes on a mixed Thursday for emerging markets assets.

"It was a pretty active day, flow-wise," a London-based trader said. "Spreads, for the most part, closed out wider."

Indeed, the JPMorgan Emerging Markets Bond Index Plus spread widened by 6 basis points to Treasuries plus 290 bps, with Venezuela an underperformer. The sovereign's cash bonds were wider by 31 bps while its five-year credit default swaps spread was 40 bps wider on speculation that the sovereign could issue new bonds in the next four weeks.

"It was an old-school day with lots of volatility and rumors flying," a London-based market source said. "Net-net, we are ending up with the EMBI back at the wides of the year. The combination of weak U.S. data, news that the IMF may not release the next tranche to Greece and Kazakhstan contagion brought out sellers galore."

Poland, VTB do deals

In its new deal, Poland priced €460 million notes due June 8, 2026 at par to yield 5.361%, or mid-swaps plus 165.7 bps, according to an announcement from sovereign's Ministry of Finance.

Commerzbank was the bookrunner for the Securities and Exchange Commission-registered notes.

Also on Thursday, Russia-based VTB Capital priced S$300 million notes due June 6, 2014 at par to yield 3.4%, in line with talk, which was set at 3.3% to 3½%.

OCBC and VTB Capital were the bookrunners for the notes, which are guaranteed by Moscow-based lender JSC VTB Bank.

And Russian Agricultural Bank priced $800 million subordinated notes due June 3, 2021 at par to yield 6%, a market source said.

The notes priced in line with talk, which was set at the 6% area.

Barclays Capital, JPMorgan and VTB Capital were the bookrunners for the Rule 144A and Regulation S notes.

Santander, TAM sell notes

Also on Thursday, Banco Santander Brasil priced a $200 million tap of its existing 4¼% notes due Jan. 14, 2016 at 100.266 to yield 4.185%, or Treasuries plus 250 bps, a market source said.

Barclays Capital, HSBC and Santander were the bookrunners for the Rule 144A and Regulation S deal, the proceeds of which will be used for general corporate purposes.

Also from Brazil, TAM Capital 3 sold $500 million 8 3/8% notes due June 3, 2021 at 99.169 to yield 8½%, or Treasuries plus 541.5 bps, a market source said.

The notes - guaranteed by TAM Linhas Aereas SA and TAM SA, a Sao Paulo-based airline - were talked at 8½% to 8¾%.

BTG Pactual, Santander and BB Securities were the bookrunners for the Rule 144A and Regulation S notes, which are non-callable for five years and include a change-of-control put at 101% with a ratings downgrade.

Proceeds will be used for debt refinancing, pre-delivery payments and general corporate purposes.

OGX prices bonds

In another deal from Brazil, oil and gas exploration and production company OGX Petroleo e Gas sold $2.563 billion senior notes due 2018 at par to yield 8½%, a market source said.

The pricing matched guidance, which was set at the 8½% area.

JPMorgan, HSBC, Credit Suisse and Itau were the bookrunners for the Rule 144A and Regulation S notes.

Proceeds will be used for the appraisal and development of the company's Waikiki and Waimea complexes in the Campos Basin, to fund production and development and for general corporate purposes.

And Brazil-based power generator Centrais Eletricas do Para SA (Celpa) set price guidance for its planned issue of five-year dollar notes at the 10 1/8% area, a market source said.

Bradesco BBI, HSBC, Itau and Standard Bank are the bookrunners for the Rule 144A and Regulation S notes, which include a change-of-control put at 101% and are non-callable for three years.

Proceeds will be used for the repayment of short-term debt.

New HSBC notes tick up

Thursday also saw HSBC Bank Middle East sell $500 million 3.575% notes due 2016 at par to yield mid-swaps plus 155 bps via bookrunner HSBC in a Regulation S deal.

The notes priced in line with guidance, which was set at the mid-swaps plus 160 bps area.

The notes immediately traded up at 100.30 bid, 100.50 offered with active two-way interest, a trader said.

Later in the day the notes were seen at 100.35 bid, 100.45 offered.

"That ticked up nicely, doing a lot of work around 100.40, and goes out wrapped around that level or unchanged, spread-wise," a trader said. "I think the bond is OK here, but perhaps can grind in another 5 to 7 bps."

In other news, China-based construction machinery manufacturer Lonking Holdings Ltd. set price talk for its planned five-year issue of dollar-denominated notes at 8½% to 8¾%, a market source said.

Credit Suisse is the bookrunner for the Rule 144A and Regulation S notes, which are non-callable for three years and expected to price by the end of the week.

Romania, NTPC set bookrunners

Thursday also saw Romania mandate Erste Group and Societe Generale for a roadshow that will begin June 6 and travel through Europe, a market source said.

The sovereign announced in February its plans for a euro-denominated offering of notes.

No other details were immediately available on Thursday.

And India's government-owned power generator, NTPC Ltd., mandated Barclays Capital, Citigroup, Deutsche Bank and RBS for a dollar-denominated offering of benchmark-sized senior notes due 2021, a market source said.

A roadshow will be held soon.

Also planning a roadshow is Indonesia-based copper and aluminum rod fabricator PT Aluco, which on Thursday mandated BNP Paribas and DBS Bank. The roadshow will take place from May 30 to June 1 in Hong Kong, Singapore and London.

Kookmin, Kia plan roadshows

From Korea, Seoul-based lender KB Kookmin Bank selected BNP Paribas, JPMorgan, ING, RBS and UBS for a roadshow in Asia and Europe starting May 30, a market source said.

No other details were immediately available on Thursday.

Also from Seoul, automobile manufacturer Kia Motors mandated Bank of America Merrill Lynch, Citigroup, Korea Development Bank and Morgan Stanley as the bookrunners for a benchmark-sized issue of dollar-denominated notes, a market source said.

A roadshow for the Rule 144A and Regulation S deal will start May 30 and travel to Singapore, Hong Kong, London, Los Angeles, New York and Boston.

Middle East mixed

In trading, the recent issue of notes from the United Arab Emirates' SIB Sukuk Co. II Ltd. - $400 million 4.715% notes due 2016 that priced at a spread of 270 bps over mid-swaps - was seen Thursday at 101.625 bid, 101.875 offered in the morning before finishing the day at 101.60 bid, 101.85 offered.

Lebanon saw ongoing demand, particularly for its new 2019 notes, which priced at par on May 18 and were trading at 100.03 bid, 100.18 offered on Thursday, a trader said.

"Locals seem happy picking them up just above par," he said.

Also from the Middle East, the recent 2.35% sukuk notes due 2016 from Islamic Development Bank, which priced at par, were seen at 99.62 bid, 99.87.

And Qatar opened tighter by 1 to 2 bps, the trader said.

Bahrain, Mubadala get support

Also from the Middle East, Bahrain names were well supported, and better buying was seen for BBK's 2015s, which traded at 97.37 bid, 97.87 offered on Thursday.

Bahrain's 2020 notes were 5 bps wider - at 98.50 bid, 98.99 offered - following the news that Moody's Investors Service had downgraded the government's bond ratings by one level to Baa1.

And good Street buying was seen for Mubadala Development Co. PJSC.

Africa in focus

From Africa, the 8¾% notes due 2021 from Senegal that priced May 6 at 97.574 to yield 9 1/8% were trading at 104.25 bid, 104.75 offered on Thursday.

"Senegal is doing well with plenty trading near 104.50 on reports the bond will enter the EMBI index," a trader said.

And good Street interest was seen for Egypt, he said, particularly for the sovereign's 2020 bonds. They were trading at 98.75 bid, 99.25 offered on Thursday.

"Egypt paper remains a little soggy, although there was some good Street buying," the trader said. "It faded in the afternoon, closing at 98.50 bid, 98.85 offered."

And the 7½% 2016 notes from Nigeria's GTB Capital BV - which priced on May 12 at 98.981 - were seen Thursday at 102 bid, 102.50 offered.

"GTB continues to march along," he said. "We traded both sides on the 2016s and are seeing better buyers emerge on the 2012s."

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