Coca-Cola Femsa, Copeinca price deals; Cable and Wireless marketing notes to EM accounts

By Cristal Cody and Paul A. Harris

St. Louis, Feb. 2 - The EMBI-Plus index finished the Tuesday session at 302 basis points bid, 2 bps tighter on the session, according to a buyside source based on the U.S. West Coast.

Russian emerging markets were stronger on Tuesday, according to a London-based trader who spoke at the end of the European session.

Russia's credit default swaps were about 4 bps tighter at 191 bps mid, the trader said.

Meanwhile, Russian emerging markets overall firmed along with a rise in equities in Europe.

For example, Moscow-based energy company TNK-BP's new 7¼% notes due 2020 were 2 bps tighter on the day, the trader said. The notes were seen closing at 99 5/8 bid, 99¾ offered. The notes in late January at 98.263 to yield 7½%.

Brazil five-year credit default swaps were 141 bps mid in the European afternoon, 2.75 bps wider, according to a market source.

Mexico five-year CDS were 148.875 mid, 3.75 bps wider.

Coca-Cola Femsa

In the primary market, Coca-Cola Femsa SAB de CV sold an upsized $500 million of 4 5/8% 10-year notes on Tuesday to yield Treasuries plus 105 bps, an informed source said.

The size of the note issue was increased from $400 million, and the deal was heavily oversubscribed with $2.5 billion on the books. Initial guidance was 115 bps to 125 bps, was later tightened to 110 bps and then launched at 105 bps, where it was priced.

The notes (A3/A-/A) sold at 99.491 to yield 4.689%. They are non-callable.

The deal played predominantly to U.S. high-grade accounts that realized they could own Coca-Cola bonds with a 30 bps concession to the domestic Coca-Cola Co., which partly owns Femsa.

Bank of America Merrill Lynch and Goldman Sachs & Co. were the bookrunners.

The bottler of Coca-Cola products for Latin American countries is based in Monterrey, Mexico.

Shortly after the notes broke for trading they were 103 bps bid, versus the 105 bps issue spread.

Copeinca oversubscribed

In a Latin high-yield play, Peru's Copeinca ASA priced a $175 million issue of 9% seven-year senior notes (B2/BB-) at 99.364 to yield 9 1/8%.

The yield printed 25 bps through initial price talk that was in the 9½% area.

Credit Suisse Securities (USA) LLC ran the books.

The issuer is a leading fishmeal and fishoil producer.

The Copeinca deal was significantly oversubscribed, according to a U.S.-based investor, who added that although yield conversations began in the mid-9% range, it became apparent that demand for the paper was ultimately going to drive the print well south of that range.

Cable and Wireless

U.K.-based Cable and Wireless plc will begin a roadshow on Thursday in Boston for its $500 million offering of seven-year senior secured notes (Ba2/BB) in a deal that is being marketed to both high-yield and emerging market accounts.

The roadshow moves to the West Coast on Friday and to New York on Monday.

Barclays Capital, BNP Paribas, JPMorgan and RBS are joint bookrunners for the Rule 144A and Regulation S deal. Citigroup, HSBC and Lloyds are co-managers.

The notes, which will be issued by Sable International Finance Ltd., come with four years of call protection.

Proceeds will be used to refinance debt and to provide liquidity.

The prospective issuer is a Bracknell, England-based telecommunications services provider to British Virgin Islands, Cayman Islands, Panama, Macau, Maldives, Monaco, Seychelles, the Falkland Islands, St. Helena, Turks and Caicos Islands, Anguilla, Guernsey and Bermuda.

Andrea Heisinger contributed to this market commentary

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