Primary hosts deals from Jamaica, Zambia, Ardshinbank; commodities weaken, EM spreads widen

By Christine Van Dusen

Atlanta, July 23 – Jamaica, Zambia and Armenia’s Ardshinbank CJSC were among the issuers to print notes on Thursday as U.S. oil prices declined, hurting cash prices and widening spreads for emerging markets assets.

Asian credits put in a soft morning session, with investment-grade cash bonds unchanged to 2 basis points wider as recent new issues underperformed, a London-based trader said.

“Korea closed unchanged,” he said. “India closed unchanged, but we had buy interests returning in the 10-year corporates.”

India-based Adani Ports and Special Economic Zone Ltd.’s new $650 million 3½% notes due 2020 that priced Wednesday at 99.524 to yield Treasuries plus 195 bps moved to 202 bps in trading on Thursday, another trader said.

BofA Merrill Lynch, Barclays Capital, Citigroup and Emirates NBD Capital were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund new projects.

About 36% of the orders went to accounts in the United States, 34% to Asia, 24% to Middle East and 6% to Europe, with fund managers buying 45%, banks 41%, insurers 10%, private banks 3% and sovereign wealth funds 1%.

“First print was down at 194 bps, and we continued to leak wider, last down at 202 bps to close at 203 bps bid, 200 bps offered,” he said. “Had small flippers at the break, out of Asia, while the rest of the session was quiet with little support.”

The new issue of notes from China’s Bank of Communications – $2.45 billion 5% perpetual notes that priced Wednesday at par – were wrapped around par for most of the morning before closing at par bid, 100¼ offered, he said.

Bocom HK, Bocom International, Deutsche Bank, HSBC, Citic CLSA, CCB International, Goldman Sachs Asia, Citigroup and JPMorgan were the bookrunners for the Regulation S deal.

Asian bonds stay soft

Later in the day, Asian bonds remained “very soft, given the strength of Treasuries, and the curve continues to flatten despite one of the lowest jobless claims for the last few decades,” a London-based trader said.

Indonesia and Philippines felt some pressure in the afternoon, he said.

“The high-yield space is a touch weaker,” he said.

Lat-Am in focus

Looking to Latin America, low-beta names continued to see aggressive selling, a New York-based trader said.

Brazil’s five-year credit default swaps spreads closed at 291 bps from 275 bps and traded as wide as 295 bps, he said. Mexico’s CDS closed at 134 bps from 127 bps.

“Cash prices managed to bounce off the lows of the day but still finish lower, with Brazil continuing to underperform, albeit with good liquidity in the on-the-run issues throughout this downtrade,” he said. “Flows picked up today in the face of increased volatility. Inquiries were balanced, from what we saw.”

‘Tough day’ for Lat-Am

On the corporate front from Latin America, it was a “tough day” for most credits as a result of Treasury moves and the continuing corporate scandal in Brazil, another New York-based trader said.

Brazilian corporates continued to see weakness, with names like Petroleo Brasileiro SA and Vale SA moving out as much as 20 bps.

Banks from Colombia moved lower, he said.

But Cencosud SA stood its ground, he said, moving a bit higher. Mexico’s Cemex SAB de CV was on that short list too, as investors became more comfortable with the latter credit and its current valuation.

Issuance from Jamaica

In its new deal, Jamaica priced a $2 billion two-tranche issue of notes due in 2028 and 2045, according to a filing.

The $1.35 billion 6¾% notes due April 28, 2028 priced at 99.960 to yield 6¾%.

The 650,000 7 7/8% notes due July 28, 2045 priced at par to yield 7 7/8%.

BofA Merrill Lynch and Citigroup are the bookrunners for the Regulation S and Securities and Exchange Commission-registered deal.

The proceeds will be used to purchase debt and for other budgetary purposes.

Zambia prints notes

Zambia priced $1.25 billion 8.97% amortizing notes due July 2027 at 97.257 to yield 9 3/8%, a syndicate source said.

The notes were talked at a yield in the 9½% area.

Barclays and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal, which could price as soon as Thursday.

The notes have an 11-year average life and three equal redemption payments in July 2025, July 2026 and July 2027.

Ardshinbank sells bonds

In another deal on Thursday, Armenia-based bank Ardshinbank priced $100 million 12% notes due 2020 at par to yield 12%, matching talk, a market source said.

JPMorgan was the bookrunner for the Rule 144A and Regulation S deal.

And Argentina’s Neuquen Province is looking to issue $350 million of notes in August or September, a market source said.

Minmetals gives guidance

China Minmetals Corp. set talk for a two-tranche issue of benchmark-sized and dollar-denominated notes due in five and 10 years, a market source said.

The five-year notes were talked at a spread in the Treasuries plus 215-bps area. The 10-year notes were talked in the Treasuries plus 265-bps area.

Deutsche Bank, HSBC, JPMorgan, ICBC and Citigroup are the bookrunners for the Regulation S deal.

The proceeds will be used for general corporate purposes and for refinancing of indebtedness.

The issuer is based in Beijing.

Zhuhai Huafa sets roadshow

China’s Zhuhai Huafa Group Co. Ltd. set out on Thursday for a roadshow to market a renminbi-denominated issue of notes, a market source said.

Credit Suisse is the sole global coordinator, lead manager and bookrunner for the deal.

The company is a conglomerate based in Zhuhai.

Pemex prices notes

On Wednesday, Mexico’s Petroleos Mexicanos SAB de CV priced a $525 million issue of 2.46% notes due in 2025 at par to yield 2.46%, a market source said.

Credit Agricole CIB, Citigroup and Santander were the bookrunners for the deal.

Pemex is a Mexico City-based petroleum company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.