Pacific Rubiales bonds plummet after takeover bid is dropped; China recovering, ‘very active’

By Christine Van Dusen

Atlanta, July 9 – Latin America-focused Pacific Rubiales Energy Corp. remained on radar screens on Thursday morning – with its bonds plummeting as much as 12 points – on a Thursday that saw risk appetite begin to creep back after Wednesday’s bubble-burst in the Chinese stock market.

Mexico’s Alfa SAB de CV and Harbour Energy Ltd. on Wednesday announced the withdrawal of their takeover bid for Pacific Rubiales – an offer of $5.11 per share, valued at about $1.7 billion – because they were unwilling to up the bid, even after seeing that a large number of shareholders believed it was far too low.

In other news on Thursday morning, Asian bonds were “very active,” led by “extreme moves” in Chinese equity markets, a London-based trader said.

This followed major losses on Wednesday, after some firms halted trading to stem selling and the police investigated short-selling.

“Opened with a very grim tone,” he said. “Chinese financials were 4 basis points to 5 bps wider and are now largely back to unchanged, even 1 bp to 2 bps tighter in some names.”

Other corporates from China were down as much as 10 bps at the open but bounced back by about 3 bps on the day, a trader said.

“Good two-way flows in the Korea space,” he said. “Philippines has been rock-solid, with the long end opening unchanged and rallying a ½ point.”

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