Saudi notes tighten in first-day trading; older Saudi notes firm; new Mexichem tightens

By Rebecca Melvin

New York, Sept. 28 – Emerging markets were described as strong on Thursday as $12.5 billion of new sovereign debt for Saudi Arabia hit the market, and those new notes moved tighter in active trade, a market source said.

The new $3 billion of Saudi 2 7/8% notes due 2023 remained under par but were higher than issue at 99.73 bid, 99.76 offered. The 2 7/8% notes priced at 99.336.

The $5 billion issue of Saudi 3 5/8% notes due 2028 was seen at 99.83 bid, 99.89 offered after that deal priced at reoffered 98.831.

And the $4.5 billion of new Saudi 4 5/8% notes due 2047 touched par and were seen at 99.85 bid, 100 offered, after the tranche priced at 99.390.

Meanwhile the existing curve was tighter.

“The whole curve is firm,” a trader said of Saudi Arabia’s spectrum of notes.

The Saudi intermediate notes showed the most resilience with the 3¼% notes due 2026 and 3.628% notes due 2027 tightening by 9 and 10.5 basis points, respectively.

The Saudi 2.894% notes due 2022 were seen 5.5 bps tighter at 100.45 bid, 100.65 offered, and the near-dated Saudi 2 3/8% notes due 2021 were indicated at 98.7 bid, 98.8 offered.

Outside the Middle East and Africa region, Mexichem SAB de CV priced $1 billion of senior notes in two parts, including $500 million of 4% notes due 2027 and $500 million of 5½% notes due 2048.

The new Mexichem tranches were trading tighter by about 5 bps, a New York-based trader said.

Nevertheless, the source did not consider the tranches to have traded notably, mostly likely because their deal size was not that great, the trader said.

“After a couple of days, they will stop trading,” the trader said.

Existing tranches of the Mexican chemical company were higher on Thursday on the Luxembourg stock exchange.

Elsewhere in Latin America, market players were looking at a smaller pipeline. A second Mexican chemical company, Cydsa SAB de CV, which emerged earlier in the week, came out with initial price thoughts in the high 5% range for its up to $370 million of up to 10-year notes.

Meanwhile, a planned $400 million offering of Aegea Saneamento was not expected to price until next week, when a roadshow on notes with a likely term of seven years is expected to wrap up.

© 2015 Prospect News.
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