Issue from Korea Exchange Bank; Cemex suffers; Kazakhstan deal in focus; Pemex in demand

By Christine Van Dusen

Atlanta, Oct. 7 – Korea Exchange Bank printed notes and investors eyed the new bonds from Kazakhstan on a Tuesday that saw wider spreads for most emerging markets assets.

“A vast percentage of the market was focused on the return of Kazakhstan to the capital markets,” a London-based trader said.

The sovereign’s $1.5 billion 3 7/8% 10-year notes priced at 98.387 to yield 4.073%, or mid-swaps plus 150 basis points, following talk in the 175 bps area.

The $1 billion 4 7/8% notes due in 2044 priced at 96.324 to yield 5.116%, or mid-swaps plus 200 bps, following talk in the 230 bps area.

Citigroup, HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

“This morning we saw sellers of the 10-year around 98.45 to 98.50, but prices have since fallen below reoffer,” a London-based analyst said. “The 30-year is also trading below reoffer.”

In other trading on Tuesday, Russia’s corporate bonds kept up with the move in U.S. Treasuries, and credit default swaps spreads were 1 bp tighter.

And Turkey moved wider on Tuesday morning, he said.

Bonds from the Middle East saw a little bit more activity on Tuesday, even though many investors and issuers were still observing the Eid holidays, a London-based trader said.

“Once again, firmer prices but wider spreads in this space,” he said. “Seeing some more interest on decent investment-grade names like Qtel International’s 2019s to 2028s, Abu Dhabi National Energy Co.’s 2023s and 2024s.”

Qatar sees buyers

Long-dated bonds from Qatar saw buyers, the London trader said, and demand was solid for International Petroleum Investment Co.

“It’s the opposite on Dolphin Energy, which still feels a little offered,” he said.

Kuwait-based Burgan Bank’s bonds traded as high as 100¼, he said.

“The recent National Bank of Oman and Sharjah continue to do well,” he said.

Cemex takes a hit

Looking to Latin America, Mexico’s Cemex SAB de CV was hit hard on Tuesday on the news that the company is considering a joint bid with CRH for the assets that Lafarge, Holcim is selling before a merger, a New York-based trader said.

The Cemex curve was down one point on the day, he said.

Meanwhile, Brazil-based Petroleo Brasileiro was up about 5 bps, mostly in response to Treasury moves, with the 2044s underperforming and the 2021s doing well.

High-grade names from Brazil saw Street and client support continue to wane after Monday’s election-related boost.

But most other high-grade names were quiet, he said.

Korea Exchange sells notes

In its new deal, Korea Exchange Bank priced $300 million 4¼% notes due Oct. 14, 2024 at 99.903 to yield 4.262%, or Treasuries plus 185 bps, a market source said.

BofA Merrill Lynch, Credit Agricole CIB, HSBC, KEB Asia Finance and Standard Chartered Bank were the bookrunners for the deal.

Korea Exchange Bank is based in Seoul, South Korea.

Times Property launches tap

Also on Tuesday, China’s Times Property Holdings Ltd. launched a RMB 600 million tap of its 10 3/8% notes due July 16, 2017 at 100.125, a market source said.

UBS, Haitong International, BOC International, BNP Paribas and Credit Suisse are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance indebtedness.

The property developer of mid-market to high-end residential properties is based in Guangzhou, China.

Yunnan Energy sets roadshow

China’s Yunnan Energy Investment (Overseas) Co. Ltd. will set out on Wednesday for a roadshow to market a renminbi-denominated issue of notes, a market source said.

The roadshow will be held in Hong Kong. A Regulation S issue is expected to follow.

Guotai Junan International is the sole global coordinator, joint lead manager and joint bookrunner. ABC and Huatai Financial are the joint lead managers and joint bookrunners.

The issuer is a subsidiary of Yunnan Provincial Energy Investment Group Co. Ltd., a Kumming-based developer of wind projects.

Ethiopia seeks issuance

Ethiopia is looking to issue 10-year bonds by the end of the year, a market source said.

The sovereign is expected to mandate bookrunners by December.

No other details were immediately available on Tuesday.

Pemex draws orders

The final book for Mexico-based Petroleos Mexicanos SAB de CV (Pemex) two-tranche issue of $2.5 billion notes due in 2025 and 2044 was $12.6 billion from 35 orders, a market source said.

The $1 billion 4¼% notes due Jan. 15, 2025 priced at 99.423 to yield 4.321%, or Treasuries plus 190 bps.

The notes were talked at a spread in the 210 bps area.

The $1.5 billion tap of the 5½% notes due June 27, 2044 priced at 101.895 to yield 5.371%, or Treasuries plus 225 bps.

The notes were talked at a spread in the 240 bps area.

The issue’s total size is now $4.25 billion.

BofA Merrill Lynch, Credit Agricole CIB and JPMorgan were the bookrunners for the deal.

The proceeds will be used for the early redemption of Pemex’s 2015 notes, to finance an investment program and for working capital needs.

Pemex is a Mexico City-based petrochemical company.

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