Issuance from TSKB; investors eye Brazil impeachment proceedings; eurobonds unlikely for Ghana

By Christine Van Dusen

Atlanta, May 12 – Turkey’s Turkiye Sinai Kalkinma Bankasi (TSKB) priced notes on a wider and lower Thursday for Latin American assets, as investors watched the impeachment proceedings in Brazil and also noted the weakening of U.S. Treasuries.

President Dilma Rousseff has been suspended and left the presidential palace on Thursday, with Vice President Michel Temer taking over as interim president for the length of her trial.

As a result, the tone on Thursday was odd, a New York-based trader said, with mixed performance for many bonds.

Inquiry and volumes were more subdued than they have been since Monday, he said, and Brazilian corporates were moving slightly higher.

Names like Brazil-based Vale SA were “not as jumpy” while Colombia’s Ecopetrol SA saw lower inquiry and volumes and high-grade names from Mexico were quiet, he said.

At the end of the day, Brazil’s five-year credit default swaps spreads were seen at 326 basis points from 323 bps after opening as tight as 316 bps, another New York-based trader said.

Mexico’s CDS closed at 165 bps from 164 bps and cash prices slumped, he said.

High-yield names from the region performed well, with Venezuela’s 2027s up at 44 from 43, PDVSA’s 2017s up at 59.75 from 58.25 and Argentina’s Bonar 2024s moving to 109.60 from 109.40. The latter sovereign’s 2026s traded at 103 from 102.10.

Meanwhile, Turkey’s TSKB printed its awaited deal, a $300 million issue of 4 7/8% green bonds due May 18, 2021 that priced at 99.244 to yield 5.048%, or mid-swaps plus 387.5 bps, a syndicate source said.

TSKB book ‘big’

The TSKB notes were talked at a spread of 400 bps to 412.5 bps.

BNP Paribas, Citigroup, HSBC, Standard Chartered, Commerzbank, ING and UniCredit were the bookrunners for the Regulation S-only deal.

“The book was big,” a trader said. “In all this euphoria a bid emerged for the senior non-green curve, so even at this tight level there could be some juice left.”

Political uncertainty continues

This came as Turkey continued to face political uncertainty, as a new prime minister was expected to be named ahead of a convention on May 22, a London-based strategist said.

“Worries on the EU-Turkey relationship have also flamed up,” he said, “with EU politicians and investors fearing that Turkey will not hold its end of the bargain, especially in implementing changes on fundamental rights in anti-terror laws in exchange for visa free travel to the EU.”

Ghana unlikely to issue bonds

In other news, the International Monetary Fund said that Ghana was meeting the majority of requirements as part of its financial aid program, except for steps related to wages and central bank assets, the strategist said.

“The fund’s mission chief said that Ghana has to find other available sources, as markets aren’t conducive for eurobonds,” he said.

ICBC sets talk

China’s ICBC Financial Leasing Co. Ltd. set final guidance for a three-tranche issue of benchmark-sized and dollar-denominated notes due in three, five and 10 years, a market source said.

The three-year notes were talked at a spread of Treasuries plus 157.5 bps.

The five-year notes were talked at Treasuries plus 170 bps.

The 10-year notes were talked at Treasuries plus 200 bps.

ICBC, Morgan Stanley, Goldman Sachs, HSBC and ANZ are the joint global coordinators and – with Citigroup, BofA Merrill Lynch and Wells Fargo Securities – joint bookrunners and lead managers for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

The leasing company is based in Beijing.

Korea Western sets roadshow

Korea Western Power Co. will set out on May 16 for a roadshow to market a possible issue of notes, a market source said.

BofA Merrill Lynch and BNP Paribas are leading the roadshow.

Korea Western engages in the production and supply of electricity and has headquarters in Seoul, South Korea.

© 2015 Prospect News.
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