MENA region bonds price; Nogaholding, Mubadala tranches edge up; CEE, LatAm primary quiet

By Rebecca Melvin

New York, Nov. 1 – New bonds of several Gulf Cooperation Council credits debuted in the emerging markets secondary on Thursday, but the Central & Eastern Europe and Latin America regions were quiet as the asset class limped into November, according to market sources.

The new tranches of Bahrain’s Oil & Gas Holding Co. BSC edged up after the oil and gas investment and development concern priced $1 billion of notes in dual six- and 10-year tranches on Wednesday.

The $500 million Nogaholding 7 5/8% notes due 2028 were seen trading at 100.80 bid, 101.20 offered, a London-based trader said. And the $500 million Nogaholding 8 3/8% notes due 2028 were seen doing even better at 101 bid, 101.37 offered.

Abu Dhabi’s Mubadala Development Co. PJSC’s 4½% 10-year notes edged higher after the sovereign wealth company priced $800 million of the senior unsecured notes at 99.586 to yield 4.552%, or mid-swaps plus 135 basis points. The new Mubadala notes were seen in trade at 99.85 bid, 100 offered.

And also new to the market was Islamic Development Bank’s €650 million five-year sukuk, which priced at par with a distribution rate of 0.554%. It was priced at a spread of mid-swaps plus 20 bps, but those notes were not a feature of trade.

Pricing of the four tranches cleared MENA’s new issue forward calendar, and the action was reminiscent of early September when the emerging markets primary was mostly mute save for deals priced by GCC entities.

In Latin America, there were no new deal announcements, a New York-based market source said. Other than the announced Minerva SA tender for its outstanding 8¾% perpetual notes, the market was quiet, the source said.

Minerva Luxembourg SA, a subsidiary of the Barretos, Brazil-based food processor, is tendering for $291,153,000 of outstanding notes guaranteed by parent company.

In April Minerva abandoned plans to price an offering of dollar-denominated perpetual bonds because of troubled market conditions.

Market conditions of emerging markets debt has was mostly weaker this past week as the books closed on October and the calendar page turned to the penultimate month of the year. But Brazil has been a bright spot, and state-owned energy company Petroleo Brasileiro SA has seen its notes edge upward in price.

Petrobras’ 8¾% bonds due 2026 were actively trading around 112, which is up from 111.5 earlier in the week and up from 109.5 from 109 on Friday.

Investors are eying the new government of Brazil’s president-elect Jair Bolsonaro and so far seem to like what they see. Likely finance minister Paulo Guedes supports financial market strength and said that reforming Brazil’s pension system will be a priority for the new government as will be lowering debt, accelerating privatizations and cutting interest payments.

© 2015 Prospect News.
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