America Movil prices $750 million; Odebrecht, Korea Expressway, Lumena Resources plan deals

By Paul A. Harris

St. Louis, Oct. 8 - Thursday's primary market saw one Mexican high-grade corporate price while the active forward calendar built out with new corporate deals from Brazil and China, and a quasi-sovereign from Korea.

The primary is expected to remain active over the next couple of weeks.

One reason issuance activity is expected to remain high is that cash continues to flow into dedicated emerging markets bond funds, creating a formidable technical bid, sources say.

Evidence to that effect surfaced Thursday.

Emerging markets debt mutual funds saw $336 million of inflows for the week to Wednesday, according to AMG Data Services, a market source said.

That extends year-to-date flows to $844.9 million.

American Movil upsizes

Mexico's America Movil SAB de CV priced an upsized $750 million issue of 5% 10-year senior notes (A3/BBB+/A-) at a 185 basis points spread to Treasuries on Thursday, according to market sources.

The spread came on top of final guidance, which had tightened from initial guidance of the 190 bps area.

Meanwhile the amount was increased from the launch size of $500 million.

Morgan Stanley and Goldman Sachs & Co. were joint bookrunners for the deal.

The issuer is a Mexico City-based wireless telecommunications services provider.

Demand was believed to be intense, and allocations severe, said one sell-sider, who watched the America Movil deal from the sidelines on Thursday.

High-yield corporate coming

From elsewhere in Latin America, Brazil's Odebrecht Finance Ltd. (Construtora Norberto Odebrecht SA) mandated HSBC, Banco Santander and BB Securities Ltd. as lead managers for its benchmark-sized offering of dollar-denominated 10-year notes (expected ratings /BB/BB+).

Pricing of the Rule 144A/Regulation S deal is subject to market conditions, and will be preceded by investor presentations in Europe and the United States.

Odebrecht was one of a pair of corporate deals with sub-investment grade credit ratings to roll out on Thursday.

China's Lumena Resources Corp. started a roadshow for its dollar-denominated offering of global senior notes (B1/BB-).

The roadshow wraps up on Oct. 14.

BOC International, Credit Suisse and Deutsche Bank Securities Inc. are joint bookrunners for the debt refinancing, capital expenditures and general corporate purposes deal from the thenardite mining firm.

Korea Expressway to bring benchmark

Meanwhile on the quality end of the credit spectrum, Korea Expressway Corp. started a roadshow on Thursday for its benchmark-sized dollar-denominated offering of global medium-term notes (A2).

The deal is expected to price in the early to middle part of the coming week, following a brief roadshow that will include Europe and New York.

Bank of America Merrill Lynch, Deutsche Bank, HSBC and Korea Development Bank are managing the general corporate purposes deal.

The secondary

Bond prices for Latin American names were flat to slightly higher on Thursday, according to a sell-side source.

"Some of the prices on the quality stuff are attributable to the fact that Treasuries reversed course on the long end today," the sell-sider commented.

The new Brazil 5.65% global bonds due Jan. 7, 2041, which priced at 97.498 to yield 5.8% in late September, were trading well, said the source, who referenced the 2041s at 99½ bid following Thursday's close.

Moving down the credit spectrum, sources tell Prospect News that even though it will be weeks until they are free to trade, brokers are making markets in the new Venezuela dollar-denominated global bonds.

To recap, Venezuela priced a total of $4.992 billion of the bonds earlier this week.

The Regulation S deal, in which only locals could participate, included $2.496 billion of 7¾% bonds due Oct. 13, 2019 and $2.496 billion of 8¼% bonds due Oct. 13, 2024.

Both came at 140.

Both of those issues are currently bid in the 60s, sources tell Prospect News.

The vast difference between the 140 issue price, and the trading price, is a function of the proportionately vast difference between the official dollar-bolivar exchange rate, and the much higher black market, or so-called "parallel" exchange rate.

The new Venezuela 7¾% notes due in 2019 were trading in a 69 bid context on Thursday, the sell-sider said.

Once the Venezuela bonds are free to trade in the dollar market they are expected to trade in a manner that will reflect trading in other Venezuelan global debt securities, the source said - i.e. not very well.

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