Transelec sells notes; trading mostly quiet ahead of payrolls data; Petrobras preps add-on

By Christine Van Dusen

Atlanta, July 7 – Chile’s Transelec SA was among the issuers to sell new notes on Thursday as investors digested the Federal Reserve’s minutes and looked ahead to the release of payrolls data from the United States.

The data could “open some potential potholes on the road to making more historic low yields,” a trader said. “The big question is, what’s the next big move in emerging markets?”

If global rates remain as they are, “then back up the truck and watch for EM spreads to take another leg tighter,” he said.

The Fed’s minutes “did not reveal anything mind-blowing,” a London-based analyst said. “Following mixed U.S. economic data and just ahead of the United Kingdom referendum, the Fed went back into wait-and-see mode. The UK’s decision to eventually leave the EU will rather add to uncertainty, and markets are now pricing in little prospect for a rate hike even beyond 2017.”

Trading was quiet for names from the Middle East, given that many countries in the region were celebrating Ramadan, he said.

Looking to Latin America, some names from Mexico and Chile moved higher on Thursday but most were unchanged, a New York-based trader said.

“The song remains the same, as clients are slightly better buyers here, but there’s been nibbling on both sides the last few days, and sourcing many issues in our universe is becoming even more challenging,” he said.

In its new deal, Santiago-based electricity transmission company Transelec sold $350 million notes due January 2029 at Treasuries plus 260 basis points via Citigroup, JPMorgan, Scotiabank and Santander in a Rule 144A and Regulation S deal.

The proceeds will be used to repay debt and for general corporate purposes.

Suzano guides bonds

Brazil’s Suzano Papel e Celulose SA set talk in the low-6% area for a benchmark-sized issue of dollar-denominated notes due in 10 years, a market source said.

The notes will be issued via Bahia Sul Holdings GmbH.

JPMorgan and Santander are the global coordinators for the Rule 144A and Regulation S deal. BB Securities, Bradesco BBI, BTG Pactual and Itau BBA are the joint bookrunners.

The proceeds will be used to finance and refinance eligible green projects.

Suzano is a pulp and paper company based in Salvador, Brazil.

Petrobras plans taps

Brazil’s Petroleo Brasileiro SA (Petrobras) is planning to issue taps of its dollar-denominated 8 3/8% notes due in 2021 and 8¾% notes due in 2026 via subsidiary Petrobras Global Finance BV, according to a company filing.

The original issue of 2021 notes totaled $5 billion and priced on May 23. The original issue of 2026 notes totaled $1.75 billion and also priced on May 23.

The proceeds will be used to repurchase notes in a tender offer. Any remaining proceeds will be used for general corporate purposes.

BB Securities, BofA Merrill Lynch, JPMorgan and Santander are the bookrunners for the Securities and Exchange Commission-registered deal.

Petrobras is a Rio de Janeiro-based energy company.

Galicia sets roadshow

Argentina’s Grupo Financiero Galicia SA will set out on July 11 for a roadshow to market a dollar-denominated issue of notes, a market source said.

Deutsche Bank and JPMorgan are bookrunners and Standard Chartered Bank the lead manager for the Rule 144A and Regulation S deal.

The roadshow will start in New York and travel to London, the West Coast and Boston before concluding on July 13.

Grupo Financiero Galicia is a Buenos Aires-based financial services holding company.

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