Mexico adds $1.75 billion to 2019s, 2040s; Votorantim, GEO price deals; EMBI-plus gains 3 bps

By Paul A. Harris

St. Louis, Sept. 18 - The EMBI-Plus index tightened by 3 basis points during the Friday session.

The index was at 318 bps bid heading into the late afternoon, according to an emerging markets mutual fund manager.

Meanwhile the primary market remained active, with both sovereign and corporate issues emanating from Latin America.

Mexico upsizes add-on

The United Mexican States (Baa1/BBB+/BBB+) priced an upsized, restructured $1.75 billion of issuance, tapping its fixed-rate global bonds maturing in 2019 and 2040 on Friday.

The transaction was comprised of a $1 billion add-on to the 5.95% bonds due March 19, 2019, which priced at 106.125 to yield 5.126%. The issue price printed 12.5 basis points above the 105.875 area price talk.

In an upsizing and restructuring, the deal also featured a $750 million add-on to Mexico's 6.05% global bonds due Jan. 11, 2040. This tranche priced at 100.10 to yield 6.042%.

Barclays Capital and JP Morgan ran the books.

Votorantim prices $1 billion

Meanwhile Brazilian industrial conglomerate Grupo Votorantim priced a $1 billion issue of 6 5/8% 10-year senior unsecured notes (/BBB/BBB-) at 99.102 to yield 6¾%.

The yield printed at the tight end of the 6 7/8% area price talk.

Citigroup, HSBC, Banco Itau and Banco Santander ran the books for the debt refinancing deal.

The deal played to more than $5 billion of demand, a market source said.

GEO sells $250 million

Also continuing the past week's theme in emerging markets of heavy corporate issuance, Corporacion GEO SAB de CV priced a $250 million issue of 8 7/8% five-year senior notes (Ba3/BB-/BB-) at 99.505 to yield 9%.

The yield printed on top of price talk that had been reduced from the 9½% area.

Morgan Stanley and Banco Santander ran the books.

Naftogaz holds steady

Despite the fast approaching maturity of NJSC Naftogaz's 8 1/8% notes due Sept. 30, 2009, that paper appeared to be holding in as the week was coming to an end.

A trader in London spotted it Friday at 88¾ bid.

Earlier in the week the Ukranian quasi-sovereign energy company had traded at 84 bid, 87 offered, according to a market source.

The week ahead

Corporate and quasi-sovereign names figure to be among the coming week's issuers, market sources say.

Among them is Brazil's Banco Bradesco SA, which has mandated HSBC and Bradesco BBI to lead its dollar-denominated offering of 10-year tier 2 bonds (expected ratings Baa3//BBB).

The deal is expected to launch, pending market conditions, following investor meetings in Europe and the United States.

Elsewhere Arcos Dorado BV, Latin America's biggest restaurant company, plans to start a roadshow on Monday for its benchmark-sized, dollar-denominated offering of senior notes.

The company, which owns the license to operate McDonald's restaurants throughout the region, is based in Buenos Aires, Argentina.

Morgan Stanley and Bank of America Merrill Lynch are joint bookrunners for the Rule 144A/Regulation S offering.

Moody's Investors Service is expected to assign its Ba2 issuer rating to Arcos Dorados. The expected Standard & Poor's issuer rating is BBB-.

The roadshow will feature presentations in London and Hong Kong on Monday, New York and Singapore on Tuesday, Boston, Geneva and Zurich on Wednesday, and Los Angeles on Thursday.

And Korea's National Agricultural Cooperative Federation (NACF) plans to price dollar-denominated senior fixed-rate notes (A2) following a full investor roadshow.

BNP Paribas, Deutsche Bank, HSBC and JP Morgan are leading the deal, which is being priced from the issuer's global medium-term notes program.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.