Alibaba, GOL Linhas join primary calendar; South Africa notes volatile after downgrade

By Rebecca Melvin

New York, Nov. 27 – The new issue window remained open in emerging markets on Monday as a few new deals joined the calendar following slower sessions at the end of last week when the U.S. Thanksgiving holiday pulled many market players away from their desks.

China internet company Alibaba Group Holding Ltd. was holding investor calls on Monday with more set to be held on Tuesday for three tranches of Securities and Exchange-registered dollar notes, a market source said.

The deals are being sold via joint bookrunners Morgan Stanley, Citigroup and Credit Suisse, being marketed by Goldman Sachs (Asia) LLC and JPMorgan. Co-managers are ANZ, BNP Paribas, DBS Bank Ltd. HSBC and ING.

Brazilian airline GOL Linhas Aereas Inteligentes SA was set to start a roadshow on Tuesday in London for an offering of unsecured notes (expected rating: /B-/), a market source said.

Proceeds are earmarked to fund a tender offer of the company’s $276.73 million principal amount of 8 7/8% senior notes due 2022.

The deals join Cemig Geracao e Transmissao SA, which is expected to price dollar denominated notes on Wednesday or Thursday.

Cemig is a Brazilian power generation and transmission company.

There were rustlings of at least one other deal for the Latin America region but further information was not available by Prospect News’ deadline.

Back in established issues, the Republic of South Africa’s debt curve opened sharply lower on Monday but bounced back to end the session in London higher despite a downgrade at S&P’s that pushes the debt further into junk territory.

South Africa 5.65% notes due 2047, which priced in September, were up 1.2 points at 98.15 bid, 98.70 offered, after trading as low as 96 intraday.

The $1.5 billion of 30-year notes saw demand after S&P’s action was not followed up by a similar move by Moody’s, a market source said.

S&P said it lowered South Africa’s long-term foreign currency sovereign credit rating to BB from BB+. It affirmed the B rating on its short-term foreign currency sovereign credit and said the outlook is stable.

S&P said it also lowered the long-term South Africa national scale rating to zaAA+ from zaAAA and affirmed the short-term national scale rating at zaA-1+.

“The downgrade reflects our opinion of further deterioration of South Africa’s economic outlook and its public finances.

“In our view, economic decisions in recent years have largely focused on the distribution – rather than the growth of – national income. As a consequence, South Africa’s economy has stagnated and external competitiveness has eroded,” S&P said in a news release.

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