Banco de Chile, Citic join week's long list of EM deals; spreads widen; EM inflows up

By Christine Van Dusen

Atlanta, April 26 - New deals from Banco de Chile, China's Beijing Enterprises Water Group Ltd., Credit Bank of Moscow, China's Citic Securities Co. Ltd. and Russia's OJSC MMC Norilsk Nickel finished off a busy week for emerging markets issuers.

Several other deals were in the works on Friday, including notes from Peru's Consorcio Transmantaro SA, Russian Helicopters and Mexico's Fomento Economico Mexicano SAB de CV (Femsa).

Meanwhile, spreads were slightly wider.

The Markit iTraxx SovX CEEME ex-EU index moved out 2 basis points to Treasuries plus 192 bps. The corporate index - seen Thursday at 235 bps over Treasuries - also widened 2 bps on Friday.

"Generally softer tone across Central and emerging Europe, Russia and Turkey," a London-based analyst said.

In trading, Kazakhstan-based gas company KazMunaiGaz National Co.'s $3 billion two-tranche issue of notes due 2023 and 2043 softened a bit, a trader said.

The $1 billion 4.4% notes due 2023 that priced at 99.60 moved to 100.45 bid, 100.55 offered on Friday. The second tranche of $2 billion 5¾% notes due 2043 that priced at 99.293 were seen at 99¾ bid, par offered.

BofA Merrill Lynch, Barclays, Halyk Finance and Visor Capital were the bookrunners for the Regulation S deal.

Notes from Hungary outperformed, with the sovereign's 2041s up 4 points on the week.

"The Middle East and North Africa are fairly quiet, as expected," the analyst said.

She is awaiting the new Regulation S-only issue of seven-year dollar notes from Bahrain Telecommunications Co. BSC (Batelco).

The deal is expected to price early next week.

Perpetuals remain popular

In the secondary market on Friday, the recent perpetual notes from Abu Dhabi Islamic Bank were seen at 106 bid, 106.40 offered. The notes priced at par.

The recent perpetual notes from Dubai Islamic Bank, which also priced at par, traded at 102 bid, 102.40 offered on Friday.

And Dubai-based Emirates airline's 3 7/8% notes due 2023 moved to 98.12 bid, 98.87 offered on Friday after pricing at 99.331.

GEO drops, Homex rallies

Mexico-based Corporacion GEO SAB de CV's bonds got slammed Friday after the company reported a disappointing 50% drop in revenues for the first quarter.

A trader said the 9½% notes due 2020 dropped 12 points, closing around 46.

The 8 7/8% notes due 2022 were down 6 points at 47.

Meanwhile, GEO's sector peer Desarrolladora Homex SAB de CV on Friday was trying to regain some lost ground following the Thursday release of declining earnings.

A trader saw Homex's 9¾% notes due 2020 rise 3 points on Friday to 60 while the 9½% notes due 2019 were up 6 points at 61.

Banks sell notes

In its new deal, Santiago-based Banco de Chile priced a CHF 200 million issue of 1 1/8% notes due 2018 at 100.194 to yield 1.085%, or mid-swaps plus 72 bps, a market source said.

Credit Suisse was the bookrunner for the transaction.

And Credit Bank of Moscow sold $500 million 8.7% notes due 2018 at par to yield 8.7%, following talk in the 8¾% area.

HSBC, RBI and RBS were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Beijing Enterprises bonds

China's Beijing Enterprises Water printed a $500 million issue of 4 5/8% notes due 2018 at par to yield 4 5/8%, a market source said.

The notes were talked at a yield in the 4¾% area.

ABC Hong Kong, DBS, Deutsche Bank, HSBC, Standard Chartered Bank and UBS were the bookrunners for the Regulation S deal.

The issuer is a water treatment company.

Citic prices notes

China's Citic Securities priced an $800 million issue of 2½% notes due 2018 at 99.753 to yield 2.553%, or Treasuries plus 185 bps, in line with talk.

Citic, Bank of China, HSBC, Standard Chartered, BofA Merrill Lynch, Deutsche Bank, Credit Agricole, JPMorgan, Barclays and ABC International were the bookrunners for the Regulation S deal.

Citic Securities is a Beijing-based investment bank and is a subsidiary of Citic Group.

Norilsk Nickel new deal

In another new deal, Russia's Norilsk Nickel priced a $750 million issue of 4 3/8% notes due 2018 at par to yield 4 3/8%, in line with talk.

Barclays, Citigroup and Societe Generale were the bookrunners for the Regulation S deal.

And Peru-based Consorcio Transmantaro set initial price talk at the 4¾% area for its 10-year issue of dollar-denominated and benchmark-sized notes.

Credit Suisse, Deutsche Bank, BBVA and BCP Capital are the bookrunners for the Rule 144A and Regulation S deal, the proceeds of which will be used to refinance debt.

The notes are expected to price next week.

Russian Helicopters roadshow

Moscow-based Russian Helicopters is on a roadshow for a dollar-denominated issue of notes, a market source said.

And Mexico-based beverage company Femsa has mandated BBVA, Citigroup and Goldman Sachs as bookrunners for a dollar-denominated issue of notes, according to a company filing.

The proceeds from the Securities and Exchange Commission-registered deal will be used for general corporate purposes and to refinance debt.

Rwanda notes oversubscribed

The final book for the Republic of Rwanda's $400 million issue of 6 5/8% notes due 2023 was more than $3.5 billion from 250 orders, a market source said.

The notes priced Thursday at 98.213 to yield 6 7/8%, or mid-swaps plus 498.7 bps, with BNP Paribas and Citigroup in a Rule 144A and Regulation S deal.

About 40% of the orders came from the United States, 33% from the United Kingdom, 8% from Switzerland, 6% from Asia, 5% from Benelux nations, 4% from Germany and 4% from others.

Asset managers picked up 83%, banks 10% and others 7%.

EM bond inflows rise

In other news, emerging markets bond funds saw inflows of $614 million for the week ended April 24, according to data tracker EPFR Global.

This compares to the $601 million in flows reported during the previous week.

"Fund flows into EM fixed income space have been roughly flat versus the previous week, with local currency more popular than hard currency," the London analyst said.

Indeed, the flows were four-to-one in favor of local currency funds.

Stephanie N. Rotondo contributed to this article.

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