Emerging markets end session wider; Berau Coal prices $500 million; Mexico edges off high

By Aleesia Forni

Columbus, Ohio, March 6 - Emerging markets closed wider and fairly well offered at the tail end of London's Tuesday session.

Indonesia's Berau Coal Energy Tbk. PT headed to the market this week, pricing a $500 million issue of 7¼% five-year senior notes (B1) at par on Tuesday, according to a syndicate source.

Final price talk was set at 7 3/8%, revised downward from initial talk of 7 7/8%.

Bank of America Merrill Lynch and Credit Suisse were the leads.

The notes come with three years of call protection.

A London-based trader said the deal saw "amazing demand," adding that it was 20 times oversubscribed by the end of the day's session.

The coal producer is based in Jakarta.

Mexico's (Baa1/BBB/BBB) $2 billion issue of 4¾% global notes due 2044 priced at the tight end of guidance at Treasuries plus 170 on Monday, according to a market source.

The deal was initially talked in the Treasuries plus 187.5 bps area, and official guidance was set in the area of Treasuries plus 175 bps.

A market source saw the new bonds at 99 bid, which was off their high, and subsequently saw them at 99.8 bid, 99.1 offered on the follow, compared to their issue price of 98.559.

"They timed the deal very well, and the market is a lot softer today in general," a trader remarked.

Mexico's 6.05% bonds due 2040 were quoted at Treasuries plus 145 bps bid on Tuesday morning in Europe, indicating that the new bonds, which came at 170 bps, priced with approximately 20 to 25 bps of new issue premium to investors.

The final order book was rumored to have topped $6.5 billion on Tuesday.

The crowd that gathered for Monday's Mexico deal should provide plenty of encouragement to Russia ahead of its anticipated offering, now that the Russian presidential election has concluded, a trader said.

Afren doing 'pretty well'

In the secondary market, Afren plc's 10¼% notes due in 2019, which priced at 99.976 in a $300 million transaction on Thursday, are still doing "pretty well" in the market, according to one source.

On Monday, the final book was $3.85 billion with more than 250 accounts involved.

Still, the notes are well off the high print of 103 1/8, now sitting at 102 bid, 102¾ offered.

© 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.