New Pemex long bond trades higher; volatility, commodities prices choke EM deal pipeline

By Paul A. Harris

Portland, Ore., Sept. 14 – Although there was some news on the new issue front on Wednesday, volatility in the global capital markets and weak commodity prices have slowed the new issue market, a syndicate banker said.

The big Petroleos Mexicanos SAB de CV deal (Baa3/BBB+/BBB+) that priced on Tuesday was doing reasonably well on Wednesday, with the short duration 4 5/8% notes due Sept. 21, 2023 at par ½ bid.

The longer duration 6¾% notes due Sept. 21, 2047 (31-year paper) was outperforming at 102 3/8 bid, the banker said.

The deal came in a pair of $2 billion tranches that were both priced at par.

Investors managed to dig in their heels, as the dealers were only able to whittle an eighth of a point off initial price talk on the seven-year paper, while pricing on the 31-year paper never budged from initial talk, the source remarked.

Meanwhile the iShares JPMorgan USD Emerging Markets Bond (EMB) ETF was going out modestly higher on the day at $115.20 per share, up 0.19%, or 22 cents.

Ouro Verde roadshow

Brazilian heavy equipment leasing company Ouro Verde Locacao e Servico (/BB-/BB-) started a roadshow on Wednesday for a possible dollar-denominated offering of notes, according to a market source.

The deal, being led by Bradesco, Santander and Scotia Capital, is expected to be on the road until Sept. 21.

The Curitiba, Brazil-based company leases heavy equipment, machinery and vehicles and also provides fleet managing services.

JSL mulls dollar deal

Brazilian intermodal transportation services provider JSL SA (/BB/BB) concluded a series of meetings with fixed income investors on Tuesday, according to a market source.

A benchmark dollar-denominated unsecured Rule 144A and Regulation S deal could follow; however, no such deal has yet been announced, the source added.

BB Securities, Bradesco, Morgan Stanley and Santander have the mandate.

The conglomerate, which operates in segments of supply chain dedicated services, cargo transportation and passenger transportation, outsourced fleet management and vehicle commercialization and car rental services, is based in Mogi das Cruzes and maintains corporate offices in Sao Paulo.

Jababeka mandate

Indonesian property manager PT Kawasan Industri Jababeka Tbk. announced in a Tuesday press release that it has mandated JPMorgan Securities plc, Standard Chartered Bank and UBS AG, Hong Kong Branch as joint lead managers for an offering of new notes.

The company expects to pay a coupon of 6½%.

The notes are expected to be priced on Sept. 28.

The new notes offer was announced in conjunction with a concurrent exchange offer for $260 million of the company’s 7½% guaranteed senior notes due 2019.

Afreximbank talk 250 bps

Afreximbank, the African Export-Import Bank, (Baa2//BBB-) talked a $250 million tap of its 4% notes due 2021 in the mid-swaps plus 250 basis points area, according to a market source.

The Cairo-based international bank, which specializes in trade-related financing for Africa, priced the original $750 million issue at 98.982 to yield 4.228% on May 17.

Those notes currently trade at a spread of 244 bps, the source said.

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