Deals from China Oil, KazMunaiGaz; Ukraine dips, Oi climbs; JSW puts off issuance

By Christine Van Dusen

Atlanta, Nov. 3 – China Oil and Gas Group Ltd. and Kazakhstan’s KazMunaiGaz National Co. sold notes on Monday as Ukraine bonds dipped about a point after two republics held elections and Russia moved more troops over the border.

Emerging markets assets also reacted to recent U.S. economic data, which came in above expectations, a trader said.

Meanwhile, Brazil-based Grupo Oi SA saw its bonds jump higher during the morning after an offer was made for its Portuguese assets, a New York-based trader said.

Luxembourg’s Altice SA wants to buy the assets for €7 billion, a move that would allow Oi to reduce its heavy debt burden and participate in a multi-company bid for TIM Participacoes SA.

Oi’s bid – with Mexico’s America Movil SAB and Spain’s Telefonica SA – would break up TIM and help consolidate the largest telecommunications market in Latin America.

In response to the news, Oi’s 2020s and 2022s moved up a point in early trading on Monday, the trader said.

But there was little significant Street action, he said.

“Looks like the consolidation situation could be speeding up,” he said.

The situation could become more complicated, though – other companies, including CVC Capital Partners and Bain Capital Partners, are said to be interested in Oi’s Portuguese business.

Also on Monday morning, the recent issue of notes from Peru’s Union Andina de Cementos SAA (Unacem) ticked up in trading.

The 5 7/8% notes due 2021 priced at par with BBVA, Deutsche Bank and Scotiabank in a Rule 144A and Regulation S deal.

The notes were seen trading between 101.55 and 101.80, a trader said.

“Quiet, and looks range-bound right now,” he said.

Unacem ticks lower

Later in the session, Peru-based Unacem’s new bond moved to 101½, then 101.40 and then 101.35, the trader said.

In other secondary market activity, Brazil-based Vale SA saw its bonds move 2 basis points to 4 bps wider on limited volumes, a trader said.

Spreads for Brazil’s Petroleo Brasileiro weakened again, this time by as much as 7 bps after Friday’s 2 bps-widening.

“Volumes are super-light,” he said.

Lat-Am sovereigns off

Looking to sovereigns from Latin America, spreads were mostly unchanged on Monday, though Brazil’s bonds were wider, a trader said.

Cash prices were off, he said, as Treasuries moved slightly lower and flatter.

But high-yield notes from Argentina continued to move in a positive direction, with the Bonar 2024s at 95½ and the Boden 2015s at 95, he said.

Bonds from Venezuela and PDVSA opened stronger but didn’t move much as the afternoon wore on, with the 2017s trading at 77¼, he said.

KazMunaiGaz prints notes

Kazkakhstan’s KazMunaiGaz priced $500 million 6% notes due Nov. 7, 2044 at 99 to yield 6½%, a market source said.

Citigroup, Credit Suisse, Deutsche Bank and UBS were the bookrunners for the deal.

The issuer is a gas company based in Astana.

China Oil sells bonds

In its new deal, China Oil and Gas Group priced $300 million 5% notes due May 7, 2020 at par to yield 5%, a market source said.

Deutsche Bank, JPMorgan and Morgan Stanley were the bookrunners for the Regulation S deal.

The proceeds will be used to repay certain existing indebtedness and for general corporate purposes.

Hong Kong-based China Oil and Gas invests in natural gas and energy-related businesses.

MTN launches notes

South Africa’s MTN Group Ltd. launched a $750 million issue of 10-year notes at mid-swaps plus 225 bps, a market source said.

Deutsche Bank is the global coordinator for the Rule 144A and Regulation S deal. BofA Merrill Lynch and Rand Merchant Bank are the joint lead managers.

MTN Group is a Johannesburg-based telecommunications company.

Korean corporate taps agents

Korea East-West Power Co. Ltd. has hired Barclays, BNP Paribas, BofA Merrill Lynch, Citigroup, Credit Suisse, HSBC and UBS to arrange a roadshow for a dollar-denominated issue of notes, a market source said.

No other details were immediately available on Monday.

The issuer is an electricity generator and supplier based in Seoul, South Korea.

JSW postpones bond issuance

Poland’s Jastrzebska Spolka Weglowa SA (JSW) has postponed plans for an issue of dollar-denominated notes, a market source said.

Credit Suisse and JPMorgan were the bookrunners for the Rule 144A and Regulation S transaction.

No other details were immediately available on Monday.

JSW is a coking coal company based in Jastrzebie-Zdroj, Poland.

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