Israel prices $1.5 billion bonds; Brazilian corporate names active in primary market

By Paul A. Harris

Portland, Ore., Jan. 23 - Emerging markets credit were seen tighter heading into the New York session, according to a market source.

Ukraine sovereigns were 40 basis points tighter, and sellers were absent.

Russian quasi-sovereigns and banks were tighter on broad demand.

Demand for paper and synthetics was strong against the big move lower in U.S. Treasuries, which saw yields on government paper spike 5 bps higher during the New York session.

In the primary market Israel brought a $1.5 billion issue of 10-year paper, which priced tight to talk.

And there was news on the Brazilian corporate front.

Odebrecht Finance Ltd. set price talk at 6% for a $500 million tap of its 2023 notes, while Grupo Virgolino de Oliveira SA and Cimento Tupi SA mandated banks and set up investor meetings.

Israel prices $1.5 billion

State of Israel priced a $1.5 billion issue of 4% sovereign bonds (A1/A+/A) at a 205 bps spread to Treasuries on Monday, according to an informed source.

The spread came tight to the Treasuries plus 210 bps price talk.

Barclays, Goldman Sachs and UBS were the bookrunners.

Barclays and Goldman Sachs will bill and deliver.

Odebrecht to tap 2023 notes

Odebrecht Finance talked a $500 million add-on to its 6% senior notes due April 2023 (expected ratings Baa3/BB+/BBB-) at the 6% area.

The deal was expected to price on Monday; however, no terms were available at press time.

Deutsche Bank, Credit Suisse and Goldman Sachs are leading the deal.

The Brazilian construction company plans to use the proceeds for general corporate purposes.

The original $500 million issue priced at par in March 2011.

Grupo Virgolino picks banks

Brazil's Grupo Virgolino de Oliveira mandated BTG Pactual, Credit Suisse and Itau BBA to lead a series of investor meetings ahead of a possible Rule 144A and Regulation S transaction.

A roadshow opens on Tuesday in Santiago, Chile. Stops include Switzerland on Thursday and London on Friday.

The roadshow moves to the United States during the Jan. 30 week, with stops in Boston on Jan. 30, New York City on Jan. 31 and Los Angeles on Feb. 1.

Expected issuer ratings are B3 from Moody's Investors Service and B from both Standard & Poor's and Fitch Ratings.

The sugar and ethanol producer's contemplated deal is subject to market conditions.

Cimento Tupi to update investors

Elsewhere in the Brazilian corporate sector Cimento Tupi began a series of investor update meetings via Bank of America Merrill Lynch on Monday in New York.

Both S&P and Fitch assign their B ratings to the issuer, a Sao Paulo-based cement products and services company.

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