EM debt subdued; Banco Regional, Listrik Negara join calendar; Growthpoint, Gilex price

By Rebecca Melvin

New York, April 25 – Emerging markets debt was “subdued” on Wednesday with minimal new issue news and low activity in the secondary as market players fixated on the move in rates, according to sources.

The benchmark 10-year U.S. Treasury note yield ticked above 3% for the first time in four years on Tuesday.

The move in core rates in the last two days combined with closing in on month-end have meant flows have been particularly light, a London-based market source said.

“People are a lot more subdued than I would have expected. The feeling is there is no rush to add risk just yet, and the thinking is that even if rates rally back below 3%, we will be back up to 3%” in the near term, the source said.

Two deals joined the forward deal calendar. Paraguay’s Banco Regional SA has selected banks and scheduled roadshow meetings for a planned offering of up to $300 million of notes of up to seven-year maturity. The proceeds are earmarked to fund a tender offer for existing senior notes due in January 2019 and for general corporate purposes.

And Indonesia’s Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara has selected banks and scheduled a roadshow for an offering of U.S. dollar-denominated notes which are coming together with a tender offering for three series of existing notes.

PLN is a state-owned electricity company.

Among new issues, Growthpoint Properties International (Pty) Ltd., a real estate investment trust based in South Africa, announced it priced $425 million of five-year senior notes (expected rating: Baa3) to yield 5.872%, which was tight to initial price talk in the area of 6%.

Proceeds of the deal, which represents a redo from late last year when the REIT postponed a planned euro-denominated offering, will be used to further the group’s investment in Europe, including its initial investment into Griffin Premium Re. NV, to refinance euro debt and for general corporate purposes.

And two deals priced for Latin America. Both deals were five-year notes that are non-callable for three years. Gilex Holding Sarl priced $300 million of five-year notes at par to yield 8 ½%, and InRetail Pharma SA priced $400 million of 5 3/8% five-year notes at 99.676 to yield 5.45%.

Gilex had held off on pricing for several weeks after joining the calendar in the middle of March. Its deal priced at the tight end of initial price talk heard Tuesday of between 8½% and 8 5/8% yield.

The majority of Luxembourg-based Gilex Holding’s assets are represented by its 94.7% stake in Colombia-based Banco GNP Sudameris SA.

InRetail’s Rule 144A and Regulation S deal priced in tandem with the company’s refinance of a bridge loan associated with its acquisition of Quicorp SA in January.

InRetail Pharma is a pharmacy operator based in Lima, Peru.

In addition, China’s Huawei Investment & Holding Co., Ltd. launched €500 million of five-year notes to yield mid-swaps plus 135 basis points, according to a syndicate source.

Pricing came tight to guidance of mid-swaps plus 145 bps, plus or minus 5 bps, and compared to initial price talk of mid-swaps plus 150 bps to 160 bps.

Shenzhen, China-based Huawei is an information and communications technology company.

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