GarantiBank, Jamaica, Odebrecht sell notes; Ukraine, Russia in focus; Globoaves puts off deal

By Christine Van Dusen

Atlanta, July 1 – Turkey’s Turkiye Garanti Bankasi (GarantiBank), Jamaica and Brazil’s Odebrecht Oil & Gas Finance Ltd. printed notes on Tuesday as the ceasefire ended in Ukraine and Russia’s bonds widened in response.

The president of Ukraine called an end to the ceasefire, blaming rebel groups, while Russian officials sought an extension of the ceasefire and possible changes to trade deals with Ukraine.

“More positively, [Russian] President Putin agreed to joint border patrols yesterday,” a London-based analyst said. “These developments overall, however, have resulted in a weak start in [emerging markets].”

Indeed, Russia’s 2030 bonds widened about 2 basis points on Tuesday morning.

For bonds from the Middle East and Africa, it was a mixed trading session, a London-based trader said.

“Flows overall are light, although some European and United States activity and portfolio rejigging is happening, as a new month begins,” he said.

Abu Dhabi and Qatar bonds were trading fairly well on Tuesday, as were some bonds from Saudi Arabia and its corporates, he said.

“Kuwait, Bahrain and Dubai are a little mixed and heavy,” he said. “So it’s a case of higher-spread and higher-beta names being offered and lower-beta being supported.”

In deal-related news, Brazil’s Klabin SA, Brazil’s InterCement Brasil SA and Corporacion Nacional del Cobre de Chile (Codelco) were preparing to market deals, while South Africa sought to issue new notes.

“Supply should at least be limited through July and August in this space, allowing the redemption cash to pick up secondary paper,” the London trader said.

Also on Tuesday, Brazil’s Globoaves Finance SA postponed its planned issue of dollar-denominated notes.

Lat-Am firm

Looking to Latin America, the tone was firm on Tuesday in trading as most credits moved off the highs and liquidity was thin, a New York-based trader said.

Brazilian high-grade names, in particular, were firm, with good flows for Gerdau SA, he said. But Braskem SA was quiet.

GarantiBank sells notes

In its new deal, Turkey’s GarantiBank sold €500 million 3 3/8% notes due July 8, 2019 at 99.436 to yield 3½%, matching talk, a market source said.

The notes carried a spread of 285.4 bps over mid-swaps.

BBVA, Commerzbank, Deutsche Bank, ING and Societe Generale were the bookrunners for the Regulation S deal.

“It’s offering limited value, in our view,” a trader said.

Jamaica prints bonds

Jamaica sold $800 million 7 5/8% notes due in 2025 at par to yield 7 5/8%, a market source said.

The notes were initially talked at a yield in the low-8% area.

Citigroup was the global coordinator, and Citigroup and BNP Paribas were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for the repayment of the 10½% notes due 2014 and for general purposes of the government, including refinancing, repurchasing and retiring public debt.

The bond will amortize in three equal installments in 2023, 2024 and 2025.

Odebrecht prints tap

Brazil’s Odebrecht Oil & Gas Finance priced a $150 million tap of its 7% perpetual notes at 103, a market source said.

Morgan Stanley, BB Securities and Bradesco BBI were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to prepay corporate loans.

The original issue of $400 million notes priced at par.

Odebrecht Oil & Gas will guarantee the notes.

Odebrecht is an engineering, construction, chemical and petrochemical conglomerate based in Salvador da Bahia, Brazil.

Klabin sets roadshow

Brazil-based paper company Klabin will set out on July 7 for a roadshow to market a dollar-denominated issue of notes, a market source said.

BB Securities, Bradesco BBI, HSBC, Itau BBA and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will begin in London and Los Angeles and conclude on July 8 in New York and Boston.

Marketing trip for InterCement

Brazil-based cement and concrete company InterCement Brasil will set out on July 7 for a roadshow to market a dollar-denominated issue of notes, a market source said.

Bradesco BBI, BTG Pactual, Citigroup, HSBC and Itau BBA are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will begin in New York and Switzerland and travel to Los Angeles and London before concluding on July 9 in New York and Boston.

Codelco to host calls

Chilean copper mining company Codelco will market a euro-denominated issue of 10-year notes during investor calls, a market source said.

Deutsche Bank, HSBC and Santander GBM are the bookrunners for the Rule 144A and Regulation S transaction.

Globoaves postpones

Brazil-based food company Globoaves Finance has postponed its planned issue of $200 million notes due in five years, a market source said.

The notes were talked at a yield in the 11% area.

BCP Securities, BTG Pactual and Santander were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds were to be used to repay short-term debt and for general corporate purposes.

PZU deal oversubscribed

The final book for Poland-based Powszechny Zaklad Ubezpieczen SA’s (PZU) €500 million 1 3/8% notes due July 3, 2019 was €1.25 billion from 95 accounts, a market source said.

The notes came to the market at 99.407 to yield mid-swaps plus 85 bps.

About 30% of the orders came from Poland, 20% from Germany and Austria, 15% from Switzerland, 10% from the United Kingdom, 8% from Europe, 6% from Benelux, 5% from France, 5% from Scandinavia and 1% from others.

Fund managers picked up 71%, pension funds and insurers 14%, supranationals 8% and banks and private banks 7%.

BofA Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and UBS were the bookrunners for the Regulation S deal.

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