Issuance from Peru; EM spreads tighten slightly; deals from Indiabulls, Vietnam ahead

By Christine Van Dusen

Atlanta, Oct. 30 – Peru printed notes on Thursday as the picture improved for most emerging markets assets.

“We are opening better,” a London-based analyst said. “The Federal Open Market Committee statement was somewhat more hawkish than expected, but rates have been, overall, fairly stable.”

Spreads tightened slightly for most emerging markets bonds on Thursday morning, and good buyers were seen for bonds from Turkey, he said.

“We are also seeing some interest in select Russian names,” he said, pointing to OJSC Gazprom and JSC Gazprom Neft.

In other news from Russia, a court on Thursday ruled to nationalize AFK Sistema’s stake in OAO Bashneft. Prosecutors say Bashneft should not have been privatized and that all the subsequent share transactions were illegal. Sistema’s chairman was put under house arrest in September for allegedly laundering money.

The good news for Sistema was that the prosecution did not expand its claims against the company, the analyst said.

“Sistema’s 2019s are up 6 points this morning,” he said.

Gas talks between Russia and Ukraine were also continuing on Thursday.

So far this week, sovereign bonds from Ukraine have seen some profit-taking, said Svitlana Rusakova of Dragon Capital.

Quasi-sovereigns have seen some demand, she said, with the 2015s from State Export-Import Bank of Ukraine (Ukreximbank) receiving extra attention.

Looking to the Middle East, Bahrain bonds had a solid bid, with the 2022s and 2023s moving up as much as 12 basis points over the week, a London-based trader said.

“Saudi Electricity Co.’s long end saw some demand,” he said. “We saw the 2043s and 2044s firm up as the day wore on.”

Damac sees two-way activity

Dubai’s Damac Real Estate Development Ltd. saw two-way activity between 95.12 and 95¾ after hitting a low of 94¼ earlier this week, the London trader said.

The notes previously priced at par.

And Kuwait Energy bonds were trading in the mid-to-high-103s, he said.

“On the perpetual side, there still paper around on Abu Dhabi Islamic Bank and Al Hilal, along with Emirates Islamic Bank and Dubai Islamic Bank buying,” he said. “Kuwait Projects Co.’s 2019s were very popular again. This one has the best technicals of the Kipco curve and is trading with a 105 handle again.”

Qatar tighter, IPIC popular

The London trader also noted good interest in Qatar, with the 2019s closing 10 bps better on the week.

“Interesting to see International Petroleum Investment Co.’s 2021s very popular, with good size trading in the market,” he said. “All told, a very technical and patchy market. The spread opportunities from the wild gyrations in global markets two weeks ago have largely evaporated.”

Lat-Am in focus

From Latin America, bonds from Brazil-based Petroleo Brasileiro opened about 8 bps tighter on Thursday, with heavy volumes early in the morning, a New York-based trader said.

In general, high-grade names from Brazil were a bit firmer, he said, but quiet overall.

Brazil-based Odebrecht SA traded better, he said, and the curve for Mexico’s Cemex SAB de CV was firm.

“The 2021s are leading and the 2025s are lagging,” he said on Thursday morning.

Unacem remains strong

The recent issue from Peru’s Union Andina de Cementos SAA (Unacem) – $625 million 5 7/8% notes due 2021 that priced at par – was still strong on Thursday, the New York trader said.

The notes were talked at a yield in the low-6% area and were led by BBVA, Deutsche Bank and Scotiabank in a Rule 144A and Regulation S deal.

The notes remained at 101½ before trading up at 101.80, he said. In the afternoon the notes were seen closer to 102.

The proceeds will be used for financing an acquisition, to refinance existing indebtedness and for general corporate purposes.

Rio Oil underperforms

In other trading from Latin America, Rio Oil & Gas underperformed into the close, the New York trader said.

And corporates from Chile were mostly quiet on Thursday afternoon, with recent new issues weakening slightly, he said.

He pointed to Chile-based SACI Falabella’s $400 million issue of 4 3/8% notes due 2025 that priced at 99.932 with JPMorgan, Credicorp and Scotiabank in a Rule 144A and Regulation S deal.

The deal had “gone quiet” as of Thursday afternoon and was better offered, he said.

Peru prices bonds

In its new deal, Peru priced a two-tranche issue of sol- and dollar-denominated notes due in 2024 and 2050, a market source said.

The deal included S./ 3.25 million notes due August 2024 that priced to yield 5¾%. The notes were initially talked at a yield in the 6% area before guidance was tightened to the 5 7/8% area.

Other pricing details for the tranche were not immediately available on Thursday afternoon.

The $500 million tap of the sovereign’s 5 5/8% notes due 2050 priced at 112.208 to yield 4.9%, or Treasuries plus 185 bps. The notes priced tight to talk, set in the 190 bps area.

BBVA, BofA Merrill Lynch and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general budgetary purposes.

Indiabulls names bookrunner

India’s Indiabulls Financial Services Ltd. has mandated Deutsche Bank as the bookrunner for a dollar-denominated issue of Regulation S bonds, a market source said.

The notes will be issued by subsidiary Century Ltd.

Indiabulls Financial Services is a retail financial services company based in New Delhi.

Vietnam sets size

Vietnam has set the size at $1 billion for its upcoming issue of notes, a market source said.

Deutsche Bank, HSBC and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

A roadshow began on Wednesday.

Hong Kong Aviation sells notes

Hong Kong Aviation Ltd. priced RMB 800 million 7½% notes due in 2016 to yield 7.6%, a market source said.

Guotai Junan, DBS and Wing Lung Bank were the joint global coordinators for the Regulation S deal. CLSA and Daiwa Capital Markets were the other joint bookrunners.

Other details were not immediately available on Thursday.

British Columbia prints notes

British Columbia sold RMB 3 billion 2.85% notes due Nov. 13, 2017 at par to yield 2.85%, according to a filing from the sovereign.

Bank of China and HSBC were the bookrunners. RBC and ICBC were the co-managers for the Securities and Exchange Commission-registered deal.

The proceeds will be paid into the Consolidated Revenue Fund of British Columbia and will be used for general governmental purposes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.