EM investors digest Petrobras' megadeal; issuance from CBD, Golden Eagle, America Movil

By Christine Van Dusen

Atlanta, May 14 - Commercial Bank of Dubai PSC (CBD), Mexico's America Movil SAB de CV and China's Golden Eagle Retail Group Ltd. sold notes on Tuesday as the market digested the recent record-breaking issue of bonds from Brazil-based Petroleo Brasileiro SA's (Petrobras).

"Petrobras' $11 billion six-tranche deal ... shows that demand for EM bonds remains strong," a London-based analyst said.

Meanwhile, the Markit iTraxx SovX CEEME ex-EU index spread on Tuesday widened 8 bps to 178 bps over Treasuries. The corporate index spread was seen at Treasuries plus 220 bps.

"Turkey's long-end continues to be under pressure, down a 1/2-point, with corporates unchanged," the analyst said. "Central and emerging Europe are opening flat. Ukraine is trading down a 1/2-point."

Russian corporates saw better demand on Tuesday, particularly for bonds from OAO Lukoil, Uralkali, Polyus Gold International Ltd. and Nord Gold NV, the analyst said.

"Most names, however, are 1 bp to 2 bps wider," she said.

The new $200 million issue of 7½% notes due 2020 from Hungary-based ammonia and fertilizer producer Nitrogenmuvek Zrt traded Tuesday at 101 bid, 101½ after pricing at 98.011 via BNP Paribas and Raiffeisen Bank International in a Rule 144A and Regulation S deal.

The deal drew a final book of more than $450 million from 95 accounts, with 33% from the United Kingdom, 25% from the United States, 17% from Switzerland, 14% from Germany and Austria and 11% from others.

But this was eclipsed by the final book for Petrobras' $11 billion issue of global notes due in 2016, 2019, 2023 and 2043.

The deal attracted $42.2 billion in orders, with about $14 billion for the 10-year notes, $7.5 billion for the 30-year, $12.2 billion for the two five-year tranches and $9 billion for the three-year, a New York-based trader said.

Petrobras notes perform

Petrobras' Securities and Exchange Commission-registered deal - the biggest ever from an emerging markets issuer - included $1.25 billion 2% notes due 2016 that priced at 99.584 to yield 2.144%, or Treasuries plus 175 bps.

These notes traded Tuesday at Treasuries plus 142 bps, the New York trader said.

The company priced another $1 billion of notes due 2016 at par to yield Libor plus 162 bps. The notes traded Tuesday at 100 5/8 bid, the trader said.

Investors like Petrobras 2019s

Petrobras also priced $2 billion 3% notes due 2019 at 99.352 to yield Treasuries plus 230 bps, which traded Tuesday at Treasuries plus 215 bps.

A $1.5 billion tranche of notes due 2019 priced at par to yield Libor plus 214 bps and traded Tuesday at 1011/2.

The notes due 2023 totaled $3.5 billion and carried a 4 3/8% coupon, pricing at 98.828 to yield 4.522%, or Treasuries plus 260 bps. They traded at Treasuries plus 246 bps on the bid side and 243 bps on the offer side.

Petrobras 2043s in demand

Petrobras' final tranche - $1.75 billion 5 5/8% notes due 2043 that came to the market at 98.027 to yield 5.764%, or Treasuries plus 265 bps - traded Tuesday at Treasuries plus 257 bps on the bid side and 254 bps on the offer side.

BB Securities, BofA Merrill Lynch, Citigroup, HSBC, Itau BBA, JPMorgan and Morgan Stanley were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for capital expenditures and general corporate purposes.

CBD prices notes

Commercial Bank of Dubai priced a $500 million issue of 3 3/8% notes due in 2018 (Baa1) at mid-swaps plus 250 bps, a market source said.

The notes were talked at a spread in the 275 bps area before guidance was narrowed to the 260 bps area.

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

Other details were not immediately available on Tuesday.

America Movil sells bonds

Mexico-based telecommunications company America Movil priced a CHF 300 million increase of its 1 1/8% notes due 2018 at 101.061 to yield mid-swaps plus 47 bps, a market source said.

The notes were talked at a spread in the mid-swaps plus 48 bps area.

Credit Suisse was the bookrunner for the deal.

The original CHF 250 million issue of 1 1/8% notes due 2018 came to the market in August at 99.942 to yield 1.135%, or mid-swaps plus 68 bps.

Golden Eagle Retail does deal

China's Golden Eagle Retail priced a $400 million issue of 4 5/8% notes due 2023 at 99.581 to yield Treasuries plus 275 bps, a market source said.

Talk was set in the Treasuries plus 280 bps area.

Citigroup, HSBC, BofA Merrill Lynch, JPMorgan, Morgan Stanley, BNP Paribas, Deutsche Bank, Goldman Sachs and Nomura Securities were the bookrunners the Rule 144A and Regulation S deal.

Golden Eagle Retail is a Hong Kong-based department store operator.

Pertamina prints notes

These new deals followed Monday's pricing of notes by Indonesia-based PT Pertamina, which sold $3.25 billion notes due 2023 and 2043 via Barclays, Citigroup and RBS, a market source said.

The deal included $1,625,000,000 4.3% notes due 2023 that priced at par to yield 4.3%, or Treasuries plus 243 bps.

The notes were talked at a yield in the 4½% area.

The second tranche totaled $1,625,000,000 5 5/8% notes due 2043 that priced at par to yield 5 5/8%, or Treasuries plus 251 bps.

Barclays, Citigroup and RBS were the bookrunners for the notes.

Tap from Ukraine corporate

Ukraine-focused UkrLandFarming plc priced a $150 million increase of its 10 7/8% notes due 2018 via Deutsche Bank and Sberbank in a Rule 144A and Regulation S deal.

The original $275 million notes priced at par to yield 10 7/8%.

UkrLandFarming is an integrated agricultural producer based in Nicosia, Cyprus but focused on the Ukraine.

Talk from Ukrzaliznytsia

The State Administration of Railways Transport of Ukraine (Ukrzaliznytsia) set price talk at 9 3/8% to 9½% for its dollar-denominated issue of five-year notes, a market source said.

Barclays, Morgan Stanley and Sberbank are the bookrunners for the Rule 144A and Regulation S deal.

The notes include a change-of-control put at 101.

Ukrzaliznytsia is a Kiev-based rail transport agency.

Chinese companies set talk

China's Regal Real Estate Investment Trust set talk in the 4¼% area for an upcoming issue of dollar-denominated notes due in five years, a market source said.

ABC International, Haitong International, ICBC (Asia), UBS and Wing Lung Bank are the bookrunners for the deal.

And Hong Kong-based conglomerate Citic Pacific Ltd. set talk in the 9% area for a dollar-denominated issue of perpetual notes via HSBC and UBS.

Gazprom, KNOC pick banks

In other deal-related news, Russia-based gas company OAO Gazprom mandated BNP Paribas and Unicredit as bookrunners for an issue of bonds for its Nord Stream pipeline, a market source said.

And Korea National Oil Corp. (KNOC) picked BNP Paribas, Credit Suisse and UBS for a non-deal roadshow that will take place in Switzerland.

Ghana, Russia, Latvia deals

Ghana is looking to issue bonds this year, as is Russia, with the latter aiming for $7 billion in issuance, a market source said.

Latvia is looking to issue bonds during the second half of this year.

And Mexico-based highway operator Red de Carreteras de Occidente (RCO) finished up a roadshow on Tuesday for an issue of bonds.

Yanlord taps bookrunners

Singapore-based property developer Yanlord Land Group Ltd. has tapped Citigroup, DBS, HSBC and Standard Chartered Bank for a renminbi-denominated issue of notes, a market source said.

No timing has been released for the Regulation S issue.

And Saudi Arabia-based dairy foods company Almarai is planning a dollar-denominated issue of Islamic bonds in the next 12 months.

Bright Food oversubscribed

The final book for China-based Bright Food Group Co. Ltd.'s $500 million 3% notes due 2018 was more than $3 billion from 190 accounts, with 82% from Asia and 18% from Europe.

The notes priced Monday at 99.435 to yield Treasuries plus 230 bps, tighter than talk.

ANZ, Bank of Communications, Barclays, BOCI, HSBC, ING, JPMorgan, National Australia Bank, Rabobank International and RBS were the bookrunners for the Regulation S deal.

Funds and asset managers picked up 50%, banks 26%, insurance 15% and private banks 9%.

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