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EMBI+ wider on Ukraine fears; EM funds lose $141 million; Pemex, Henderson sell benchmarks
By Paul A. Harris
St. Louis, Sept.10 - The EMBI+ index was 7 basis points wider heading into the late New York afternoon, trading at 358 bps bid, according to a market source.
The bad news: Ukraine's credit ratings are under pressure on news that it may not have further access to the next tranche of its $16 billion IMF loan.
That development had a knock-on effect on the rest of the market, said David Spegel, global head of emerging markets strategy for ING.
In the cash market the story continues to be "No offers," Spegel said.
"It's all bids, in a very thin market."
First outflow in 22 weeks
With respect to the cash picture of the dedicate emerging markets bonds accounts, the dramatic five-plus month run of cash inflows shifted during the week that ended Wednesday, according to Brad Durham, managing director of EPFR Global.
The EM bond funds saw $141.2 million of outflows, the first negative figure in 22 weeks, Durham said.
The outflow trails the previous week's $247.1 million of inflows.
Pemex prices $1.5 billion
The primary market remained active on Thursday.
Petroleos Mexicanos priced $1.5 billion of 4 7/8% notes due March 15, 2015 (Baa1/BBB+/BBB) at a 275 basis points spread to Treasuries.
HSBC, Goldman Sachs & Co. and Banco Santander were joint bookrunners.
The bonds were seen holding near the 99.251 reoffer price at the New York close, according to an asset manager who spotted them at 99.25 bid, 99.35 offered.
Henderson prices $500 million
Elsewhere Henderson Finance, a unit of Hong Kong property developer, Henderson Land Development, priced $500 million of 5½% 10-year bonds at a 210 basis points spread to Treasuries.
The deal priced tight to the Treasuries plus 220 bps price talk.
JP Morgan and HSBC were joint bookrunners.
Henderson became the second Hong Kong property developer to tap the dollar-denominated bond market in the past two weeks.
High-yield issuer Country Garden Holdings Ltd. priced a $300 million issue of five-year senior notes (Ba3/BB) at par to yield 11¾% on Sept. 2.
The new, par-pricing Country Garden paper was trading at 101¼ bid, 102 offered on Wednesday, according to a trader in New York.
Central European Media upsizes
Meanwhile in Thursday's EM high-yield action, Czech Republic-based Central European Media Enterprises Ltd. priced an upsized €200 million issue of 11 5/8% seven-year senior secured fixed-rate notes (B2/B) at 98.261 to yield 12%.
The yield printed on the tight end of the 12% to 12¼% price talk. The offering was increased from €150 million.
Deutsche Bank Securities Inc., Bank of America Merrill Lynch and BNP Paribas ran the books.
TAQA gains in trading
In secondary action, the bonds priced in the Abu Dhabi National Energy Co. (TAQA) $1.5 billion two-part deal were seen doing okay by a London-based trader, heading toward the European close.
The new TAQA 4¾% five-year notes, which priced at 99.451 (250 bps spread to Treasuries) were at par ¼ bid, par ½ offered on Thursday afternoon, London time.
Meanwhile the new 6¼% 10-year notes, which priced at 99.201, were at par 7/8 bid, 101 3/8 offered.
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