Roadshows ahead; investors hunt for yield; Turkey, Pakistan get attention; Russia draws orders

By Christine Van Dusen

Atlanta, Sept. 23 – Several issuers – including Mexico’s El Puerto de Liverpool SAB de CV, Mexico’s Banco Mercantil del Norte SA (Banorte) and Brazil-based Ultrapar Participacoes SA – set roadshows on Friday as bonds from Turkey saw some demand and notes from Pakistan were weaker.

“With the Bank of Japan and Fed out of the way, investors were in a shop-‘til-you-drop mode yesterday,” a London-based analyst said. “A Fed rate hike later in the year is now seen as more feasible, but the trajectory beyond that horizon remains dovish.”

Investors on Friday were hunting for yield, a trader said.

“Duration outperformed, and the Treasury curve bull-flattened, and this led to demand for 30-year risk.”

Looking at Turkey, the sovereign curve saw some “decent demand” in the belly from real-money investors, he said.

“The belly of the curve outperformed 3 basis points to 5 bps,” he said. “We are closing on a soft tone, and the Street takes the curve 5 bps wider into the weekend.”

Turkish banks saw two-way activity, “but better sellers for choice,” he said. “Feels like the Street is long on risk there. Corporates are a similar story – tight valuations holding back any buyers, and more profit-takers continue to come out [after] the outperformance.”

Bonds from Pakistan were weak on Friday, a trader said.

“Sellers across the curve ahead of possible issuance,” he said.

The sovereign in August announced plans for between $500 million and $1.5 billion in Islamic bonds.

In other news, the new $1.25 billion issue of notes due in 2036 from Russia drew a final order book of more than $6 billion, a market source said.

This tap of the sovereign’s 4¾% came to the market at 106.75 via VTB Capital.

Mexico’s Liverpool roadshow

Mexico’s El Puerto de Liverpool will set out on Sept. 26 for a roadshow to market a possible issue of 10-year notes, a market source said.

Citigroup, Credit Suisse and Morgan Stanley are leading the marketing trip, which will end on Sept. 28.

The retail company is based in Mexico City.

Banorte sets roadshow

Mexico’s Banorte will depart on Sept. 26 for a roadshow to market a 10- or 15-year issue of notes, a market source said.

The roadshow will begin in London and Los Angeles and conclude on Sept. 27 in Boston and New York.

BofA Merrill Lynch, JPMorgan and Morgan Stanley are the bookrunners for the deal.

Banorte is a lender based in Monterrey, Mexico.

Ultrapar to market notes

Brazil-based Ultrapar is heading out on a marketing trip on Sept. 26 for a possible issue of dollar-denominated notes, a market source said.

BB Securities, Bradesco BBI, Morgan Stanley and Santander are the bookrunners for the deal.

The roadshow will start in Boston and London and then travel to Los Angeles and New York before concluding on Sept. 28.

The issuer is a petrochemicals company based in Sao Paulo.

BRF prints bonds

On Thursday, Brazil’s BRF SA – via wholly owned subsidiary BRF GmbH – priced $500 million 4.35% notes due Sept. 29, 2026 at 97.818 to yield 4 5/8%, according to a company announcement and a market source.

BB Securities, Bradesco, Itau, JPMorgan and Santander were the bookrunners for the Rule 144A and Regulation S deal.

The Itajai-based food company will use the proceeds to refinance a portion of its foreign currency outstanding indebtedness that will settle in the short term.

Airport sells notes

Mexico City Airport priced a $2 billion two-tranche issue of notes due Oct. 31, 2026 and 2046, a market source said.

The deal included $1 billion 4¼% notes due 2026 that priced at 99.009 to yield 4.372%, or Treasuries plus 275 bps.

The $1 billion 5½% notes due 2046 priced at 98.631 to yield 5.594% or Treasuries plus 325 bps.

Citigroup, HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Issuance from Unifin

Thursday also saw Mexico’s Unifin Financiera SAB de CV sell $400 million 7¼% notes due 2023 at par to yield 7¼%, a market source said.

Credit Suisse, Citigroup and UBS were the bookrunners for the Rule 144A and Regulation S deal.

The Mexico City-based financial services provider plans to use the proceeds to refinance debt and for general corporate purposes.

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