Sabic’s new notes edge up in first-day trading; Colombia, Peru join EM primary calendar

By Rebecca Melvin

New York, Oct. 3 – Saudi Basic Industries Corp.’s newly priced tranches of 4% and 4½% notes edged up in first-day trading on Wednesday after the Riyadh-based chemicals, fertilizers, plastics and metals maker priced $2 billion of the five- and 10-year notes.

Both issues were quoted up by about 0.3 point, according to a London-based trader. The shorter-dated 4% 2023 notes were quoted at 99.65 bid, 99.75 offered. And the longer-dated 4½% notes due 2028 were quoted at 99.80 bid, 99.87 offered. Both tranches were reoffered at slightly below par.

The $1 billion of 4% five-year notes priced at 99.592 for a reoffered yield of 4.091%, or a yield spread of Treasuries plus 115 basis points, which was tight compared to guidance of Treasuries plus 125 bps and initial talk in the area of Treasuries plus 140 bps.

The $1 billion of 4½% 10-year notes priced at 99.174 for a reoffered yield of 4.604%, or a yield spread of Treasuries plus 155 bps, which was tight compared to guidance of Treasuries plus 165 bps and initial price talk in the area of Treasuries plus 180 bps.

The Arab Gulf countries continue to garner investor interest, but the emerging markets primary spread out notably on Wednesday with two new Latin American sovereigns joining the calendar, breaking a thaw that has lasted since late spring when Argentina’s peso and Turkey’s lira sunk to crisis levels when volatility hit EM currency and bond markets.

Colombia launches

The Republic of Colombia announced new issuance early on Wednesday and later launched $2 billion in a two-tranche deal, including new 10-year notes due 2029 and a tap of existing notes due 2045.

The $1.5 billion tranche of new 10-year dollar global notes launched at Treasuries plus 140 bps, which was pricing that represented tightening from initial talk for a yield in the area of Treasuries plus 165 bps.

The $500 million tap of the 5% notes due in 2045 launched at Treasuries plus 185 bps.

Colombia was also tendering to purchase its outstanding 7 3/8% notes due 2019.

Peru eyes market

In addition, the Republic of Peru announced a roadshow and mandated banks to organize a two-tranche offering of PEN-denominated, euroclearable bonds of benchmark size under Rule 144A and Regulation S and a U.S. dollar-denominated note registered with the Securities and Exchange Commission.

The notes intended to be of intermediate to long duration were being marketed by joint bookrunners JPMorgan, Morgan Stanley, Santander and Scotia. Both issues together with a possible tender were expected to be issued subject to market conditions after fixed-income investor meetings wrap up on Oct. 10.

These lower beta names in the Latin America region were likely to hold appeal to global investors.

Albania prices

Also in primary action, the Republic of Albania, through its Minister of Finance and Economy, priced €500 million of 3½% seven-year notes at 99.695 for a yield of 3.55%, as expected on Tuesday.

The deal launched tight compared to guidance at 3.6% to 3.7% and from initial price talk in the area of 3¾%.

Order books prior to launch were in excess of €1 billion.

Banca IMI, Citigroup and Societe Generale CIB were joint bookrunners of the issue.

The sovereign issuer plans to use some proceeds to buy back up to €200 million principal amount of an outstanding €450 million of 5¾% notes due 2020.

© 2015 Prospect News.
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