State Grid, Brasil Foods sell notes; Russian, Turkish notes tighten; CIMC, Yanlord ahead

By Christine Van Dusen

Atlanta, May 15 - State Grid Corp. of China and Brazil's Brasil Foods SA (BRF) were among the issuers to print notes on Wednesday as investors continued to digest Brazil-based Petroleo Brasileiro SA's (Petrobras) gigantic new issue.

The session also saw bonds from Russia tighten and notes from Ukraine remain under pressure.

"US Treasuries are rebounding this morning, following the sell-off yesterday," a London-based analyst said. "Russian corporates and quasi-sovereigns are 2 basis points to 3 bps tighter generally. In Turkey, the long-end sovereign is slightly tighter and we are seeing better buyers in corporates on the back of the sovereign stabilizing."

Sovereign bonds from Ukraine have been under pressure this week, with the 2023s trading as low as 98¼ bid, 98¾ offered, said Svitlana Rusakova of Dragon Capital.

But with the continued improvement in risk sentiment, some notes from Ukraine have rebounded, she said.

"The action in corporates was muted," she said.

Against this backdrop, several emerging markets issuers prepared to bring deals to the market, including China International Marine Containers (CIMC), Singapore's Yanlord Land Group Ltd., JSC Russian Standard Bank and Russia's Renaissance Credit Group.

In its new deal, China's State Grid priced a three-tranche issue of $2 billion notes due in five, 10 and 30 years with HSBC, Goldman Sachs, Morgan Stanley, BOC International, ICBC International, JPMorgan, Citigroup, Deutsche Bank and UBS, a market source said.

The deal included $500 million five-year notes that priced at Treasuries plus 95 bps and $1 billion 10-year notes that priced at Treasuries plus 130 bps.

The third tranche - $500 million 30-year notes - priced at Treasuries plus 135 bps.

The Rule 144A and Regulation S notes include a change-of-control put at 101.

BRF prices notes

In another new deal, Brazil-based food company BRF priced a two-tranche issue of dollar- and Brazilian real-denominated notes due in 2023 and 2018, a market source said.

The deal included $500 million notes due in 2023 that priced at Treasuries plus 220 bps. The notes were talked at a spread in the 237.5 bps area.

The second tranche - R$500 million notes due 2018 - priced at a yield of 7¾%. The notes were talked at a yield in the 7¾% area.

BB Securities, Bradesco BBI, Itau BBA, Morgan Stanley and Santander were the bookrunners for the Rule 144A and Regulation S deal.

CIMC sets talk

Also on Wednesday, China's CIMC set price talk in the Treasuries plus 265 bps area for its dollar-denominated issue of five-year notes, a market source said.

ANZ, BofA Merrill Lynch, HSBC, ING, JPMorgan, UBS and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The proceeds will be used for general corporate purposes.

Yanlord gives guidance

Singapore-based property developer Yanlord Land Group set talk at 5 3/8% for its planned three- year issue of renminbi-denominated notes, a market source said.

Citigroup, DBS, HSBC and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The proceeds will be used to finance existing and new projects.

Russian Standard roadshow

Russian Standard Bank will set out on Thursday for a roadshow to market a dollar-denominated issue of notes, a market source said.

No other details were immediately available on Wednesday.

The issuer is based in Moscow.

Fesco plans tap

Russia's Far Eastern Shipping Co. plc (Fesco) is planning a $50 million tap of its existing notes due 2018 and 2020, a market source said.

The original deal included $500 million 8% notes due 2018 that priced at par to yield 8% and $300 million 8¾% notes due 2020 that priced at par.

Goldman Sachs, ING and RBI were the bookrunners for the Regulation S deal.

Fesco is based in Moscow.

Renaissance Credit roadshow

Russia's Renaissance Credit Group will embark on a roadshow starting May 20 for a dollar-denominated issue of eurobonds, a market source said.

Goldman Sachs, Raiffeisen Bank International and Sberbank are the bookrunners for the Regulation S deal.

The roadshow will begin in London and end May 21 in Zurich and Geneva.

U.S. buyers like Ukraine deal

Kiev-based State Administration of Railways Transport of Ukraine (Ukrzaliznytsia)'s new issue - $500 million 9½% notes due 2018 that priced at par - drew most of its orders from the United States, a market source said.

About 48% of the orders came from the United States, while 21% came from the United Kingdom, 16% from Switzerland, 5% from Asia, 2% from others and 8% from Central and emerging Europe, the Middle East and Asia.

Barclays, Morgan Stanley and Sberbank were the bookrunners for the Rule 144A and Regulation S deal.

Citic Pacific oversubscribed

Also oversubscribed was China-based conglomerate Citic Pacific Ltd.'s new $800 million issue of 8 5/8% perpetual notes that priced at par to yield Treasuries plus 781.6 bps.

The final book was more than $8.5 billion from more than 220 accounts, with 85% from Asia, 12% from Europe and 3% from the offshore United States.

Private banks took up 55%, fund and asset managers 40% and others 5%.

HSBC and UBS were the bookrunners for the Regulation S deal.

Golden Eagle in demand

China's Golden Eagle Retail Group Ltd.'s $400 million issue of 4 5/8% notes due 2023 that priced at 99.581 to yield Treasuries plus 275 bps brought in more than $1 billion of orders from 105 accounts, a market source said.

About 53% of the orders came from Asia, 25% from the United States and 22% from Europe.

Asset managers and fund managers accounted for 72%, insurance 10%, private banks 9%, banks 5% and pension funds and others 4%.

Citigroup, HSBC, BofA Merrill Lynch, JPMorgan, Morgan Stanley, BNP Paribas, Deutsche Bank, Goldman Sachs and Nomura Securities were the bookrunners the Rule 144A and Regulation S deal.

Yuksel in focus

Turkey-based construction company Yuksel Insaat AS may be looking to restructure its $200 million notes due in 2015, the London-based analyst said.

"The news is not surprising, given the increasingly more difficult financial situation of the company," she said.

Earlier this year the company was downgraded to CCC+ on liquidity concerns, she said.

"The group saw its profitability reduced and credit metrics deteriorating," she said.

And after exceeding its incurrence covenant, Yuksel was unable to tap credit funding.

"Although the group has stated it has various assets that could be disposed of to raise liquidity, such disposal efforts have been going on for the past three years with not much success," she said.

The company could address the situation by issuing a new bond, she said.

Pertamina draws orders

The final combined book for Indonesia-based oil and gas company PT Pertamina's $3.25 billion two-tranche issue of notes due 2023 and 2043 was more than $14.4 billion, a market source said.

The deal included $1,625,000,000 4.3% notes due 2023 that priced at par to yield Treasuries plus 243 bps. The notes drew more than $8.7 billion from 387 accounts, with 39% from Europe, 32% from the United States and 29% from Asia.

Asset and fund managers accounted for 76%, banks 9%, insurance 7%, private banks 4% and sovereign wealth funds, pension funds and corporates 4%.

Managers pick up Pertamina

Pertamina's second tranche totaled $1.625 billion 5 5/8% notes due 2043 that priced at par to yield Treasuries plus 251 bps. The notes drew a book of more than $5.7 billion from 280 accounts.

About 40% of the orders came from the United States, 38% from Asia and 22% from Europe.

Asset and fund managers picked up 68%, banks 17%, insurance 8% and private banks 4%. Sovereign wealth funds, pension funds and corporates accounted for 3%.

Barclays, Citigroup and RBS were the bookrunners for the notes.

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