Consorcio Transmantaro, Nord Gold price notes; EM spreads narrow; Slovenia shelves deal

By Christine Van Dusen

Atlanta, April 30 - Peru's Consorcio Transmantaro SA and Russia's Nord Gold NV sold notes amid tighter spreads on an active Tuesday for bonds from Russia, Turkey, Bahrain Telecommunications Co. BSC (Batelco) and Kazakhstan-based KazMunaiGaz National Co.

"Busy day, right from the word 'go,'" a London-based trader said. "Continue to see front-dated demand across the majority of investment grade names."

The Markit iTraxx SovX CEEME ex-EU index spread on Tuesday narrowed 4 basis points to Treasuries plus 186 bps. The corporate index - seen Monday at 235 bps over Treasuries - tightened 5 bps on Tuesday.

"The market feels supported, and we expect it to grind better over the course of the day," a London-based analyst said. "Very busy start with better buying witnessed for the last trading day of April."

Most of the Middle East and North Africa had an active session on Tuesday, though Lebanon underperformed, a trader said.

"Lebanon remains lackluster," the trader said. "We're seeing very little interest in the name at the moment, despite the market today being very well supported."

Abu Dhabi Commercial Bank saw more buyers than sellers, and Kuwait-based Kipco's 2016s were in demand on Tuesday.

"A few holidays around the world tomorrow for Labor Day, so we're expecting a less active day than today," a trader said.

The day also saw Want Want China Holdings Ltd. make plans for a roadshow. And Slovenia canceled plans for its two-tranche issue of dollar notes after Moody's Investors Service downgraded the sovereign's credit rating to junk.

Batelco notes active

Bahrain-based Batelco's new issue of $650 million 4¼% notes due 2020 that priced at 99.45 was very active in trading on Tuesday, a trader said.

"The new Batelco ran into some flippers early around the par level before steady retail demand took the bond up to 100.45," he said. "The bond is closing at 100.30 bid, 100.35 offered."

BNP Paribas and Citigroup were the bookrunners for the Regulation S-only deal.

"The new Batelco has been a very solid success," the analyst said.

Busy day for Bahrain names

Bahrain's 2020s closed at 110½ bid, 111 offered on Tuesday, a trader said.

"The range traded here was 99.95 to 100.43," he said.

And two-way activity was reported for Bahrain-based BBK's 2015s between 103½ and 104.

Dubai corporates perform

Corporates from Dubai continue to trade well, the analyst said, with better buying across the board.

And the issue of 2018 dollar notes that Sharjah Islamic Bank priced earlier this month at par were sighted Tuesday at 99¾ bid, 99.95 offered.

Al Hilal Bank, HSBC, Kuwait's Liquidity Management House and Standard Chartered Bank were the bookrunners for the Regulation S sukuk.

Perpetuals underwhelm

The perpetual notes that Abu Dhabi Islamic Bank recently priced at par moved Tuesday to 106.20 bid, 106.60 offered. And the perpetuals that Dubai Islamic Bank also priced at par traded at 102.60 bid, 103 offered.

"Perpetuals didn't really take off today," a trader said.

Meanwhile, Dubai-based DP World's notes were popular on Tuesday and moved tighter.

KMG notes trade up

The recent issue of 2043 notes from Kazakhstan-based KMG has been moving up in trading so far this week, a trader said.

The gas company priced $2 billion 5¾% notes due 2043.

"An interesting move in the long end KMG yesterday, moving up from 100 1/8 bid, 100¼ offered to 100¾ bid, 101 offered in about 30 minutes," she said.

As of Tuesday morning the notes were trading at 101.1875, she said.

BofA Merrill Lynch, Barclays, Halyk Finance and Visor Capital were the bookrunners for the Regulation S deal, which included $1 billion 4.4% notes due 2023 that priced at 99.60.

New issue from Nord Gold

In its new deal, Russia-based mining company Nord Gold priced $500 million 6 3/8% notes due 2018 at par to yield 6 3/8%, at the tight end of talk.

Citigroup, Goldman Sachs, Jefferies, Natixis, Sberbank and Societe Generale were the bookrunners for the Rule 144A and Regulation S notes.

The new issue offers a 100-bps premium over Polyus Gold International Ltd.'s 2020s as well as a 150-bps premium over OAO Severstal's 2018s, the London analyst said.

"The new deal comes at a good concession over peers, partly due to its debut issuance and relatively small-sized operations exposed to high-risk locations," she said.

Peruvian corporate sells bonds

Peru-based power transmission company Consorcio Transmantaro priced a $450 million issue of 4 3/8% notes due 2023 at 99.002 to yield 4½%, a market source said.

Initial price talk was set at the 4¾% area before being revised to 4 5/8%.

Credit Suisse, Deutsche Bank, BBVA and BCP Capital were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to refinance debt.

Slovenia postpones bonds

Slovenia has postponed its planned issue of dollar-denominated notes due in 2018 and 2023 as Moody's Investors Service downgraded the sovereign's credit rating to junk, a market source said.

BNP Paribas, Deutsche Bank and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The deal included dollar notes due in 2018 that were talked at a yield in the 5% area and dollar notes due 2023 that were talked in the 6 1/8% area.

The proceeds from the deal were to be used to repay maturing debt, for budget financing and for the recapitalization of the country's banking sector.

Nitrogenmuvek in focus

Hungary-based ammonia and fertilizer producer Nitrogenmuvek Zrt on Tuesday continued its roadshow for a dollar-denominated issue of notes with BNP Paribas and Raiffeisen Bank International.

A Rule 144A and Regulation S deal is expected to follow.

"The company has a strong market share in Hungary and conservative credit metrics and robust liquidity," the analyst said. "However, it is a relatively small company and has only one site of operations, exposing it to a high degree of operational risk."

The new issue will be "an interesting addition to the high-yield corporate industry in Central Europe," she said. "We would look for more details in terms of use of proceeds and financial strategy."

Want Want sets roadshow

Want Want China, through subsidiary Want Want China Finance Ltd., will set out on a roadshow with BofA Merrill Lynch and JPMorgan for an issue of notes, according to a company filing.

A Rule 144A and Regulation S deal is expected to follow.

The proceeds will be used for refinancing debt and for general corporate purposes.

The Shanghai-based issuer manufactures rice cakes, flavored milk and other snacks and beverages.

Citic deal oversubscribed

The recent issue of $800 million 2½% notes due 2018 that China's Citic Securities Co. Ltd. priced at 99.753 to yield 2.443% drew a final book of $3.5 billion from 165 accounts, a market source said.

About 94% of the orders came from Asia while 6% came from Europe.

Banks picked up 61%, fund managers 24%, insurance and public sector 11% and private banks 4%.

Citic, Bank of China, HSBC, Standard Chartered, BofA Merrill Lynch, Deutsche Bank, Credit Agricole, JPMorgan, Barclays and ABC International were the bookrunners for the Regulation S deal.

Beijing issuer attracts orders

Also oversubscribed was China-based Beijing Enterprises Water Group Ltd.'s recent $500 million issue of 4 5/8% notes due 2018 that priced at par to yield 4 5/8%.

ABC Hong Kong, DBS, Deutsche Bank, HSBC, Standard Chartered Bank and UBS were the bookrunners for the Regulation S deal.

The deal drew more than $4 billion in orders from 145 accounts, with 93% from Asia and 7% from Europe.

Private banks accounted for 46%, fund managers 24%, banks 22%, corporates 4% and insurance and the public sector 4%.

© 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.