Morning Commentary: Credito Real eyes smaller notes deal; Vale drops after dam disaster

By Rebecca Melvin

New York, Jan. 28 – A notes offering from Mexico’s Credito Real SAB de CV Sofom ER will be smaller than initially expected after the consumer lender cancelled a tender for its 2023 notes, according to market sources.

Barclays, Citigroup, Goldman Sachs and Morgan Stanley are joint bookrunners of Credito Real’s planned Rule 144A and Regulation S deal, which is now expected to be $300 million to $350 million of intermediate duration notes, not $500 million or more.

Elsewhere, the bonds of Brazilian mining company Vale SA fell in trade on Monday after a dam breach at Minas Gerais buried mine buildings and an adjoining neighborhood with mud and iron ore waste on Friday. Sixty people were killed in the disaster, and the death toll is expected to rise. Vale is based in Rio de Janeiro.

Vale’s 6¼% notes due 2026 dropped 3.5 points to 3.75 points to 103.25 on the Frankfurt exchange. Vale’s American Depositary Receipts were down $2.21, or 16%, to $11.46 in early trading.

Elsewhere, China’s property developers were busy in the primary market. Greentown China Holdings Ltd. priced $400 million of guaranteed senior perpetual capital securities at par on Friday, with a distribution rate of 8 1/8% initially, and Future Land Development Holdings Ltd. issued on Monday $300 million of 6¾% senior notes due 2022. Greentown China is a Hangzhou, China-based property developer, and Future Land is a Hong Kong-based real estate operator and developer.

Joining the primary calendar were Jingrui Holdings Ltd., with plans to price an international offering of guaranteed dollar-denominated senior fixed-rate notes, and Yuzhou Properties Co. Ltd., with plans to price dollar-denominated senior notes. The property developers are based in Shanghai and Hong Kong, respectively.

Also toll road and property company Road King Infrastructure Ltd. announced a proposed issue of dollar-denominated notes subject to market conditions and investor demand. Road King is based in Hong Kong.

© 2015 Prospect News.
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