Mexico, Shinhan Bank, Slovenia print notes; Turkey, Petrobras, other EM bonds narrow

By Christine Van Dusen

Atlanta, April 1 - Mexico, South Korea's Shinhan Bank and Slovenia were among the issuers to print notes on the first day of the new month, a session that saw consistent buying and tighter spreads.

"Today feels stronger. Almost every region is tighter this morning, including Turkey, as the positive effects of the AKP victory continue and despite Moody's releasing a report on the negative effects of the lira depreciation on corporate credit profiles," a London-based analyst said. "We have also seen a flurry of new issues this morning."

Meanwhile, bonds from Latin America outperformed U.S. Treasuries, with many names up as much as 1¼ points across their curves, a New York-based trader said.

"We saw the start of the month and quarter bring new money into the market looking for offers," he said. "Thin dealer inventories and the consistent offer-wanted inquiry drove spreads tighter and prices higher for low-beta credits."

Still, bonds from Venezuela and PDVSA underperformed on Tuesday, he said. And bonds from Argentina were mostly unchanged.

On the corporate side, names like Brazil's Petrobras narrowed by as much as 10 basis points on Tuesday while Brazil's Vale SA saw its bonds move in about 7 bps, another New York-based trader said.

Meanwhile, inquiries for names from Colombia, Peru and Mexico were "muted," he said.

"Part of that derived from the challenge of sourcing - clients have given up trying, given illiquidity - and part being the recent inflated valuations," he said.

Odebrecht SA's 2022 notes moved higher, following last week's gains, he said.

In deal-related news on Tuesday, Saudi Electricity Co. (SECO) and Costa Rica gave guidance for upcoming issues, South Korea's KT Corp. set a roadshow and Colombia's Avianca Holdings SA announced plans for more dollar notes.

Mexico sells notes

In its new deal, Mexico priced a two-tranche issue of €2 billion notes due in seven and 15 years, a market source said.

The €1 billion 2 3/8% notes due 2021 priced at 99.828 to yield 2.402%, or mid-swaps plus 105 bps.

The €1 billion 3 5/8% notes due 2029 priced at 98.642 to yield 3.745%, or mid-swaps plus 150 bps.

BBVA, BNP Paribas and Deutsche Bank were the bookrunners for the Securities and Exchange Commission-registered deal.

Slovenia does deal

Slovenia priced a two-tranche issue of €2 billion notes due 2017 and 2021, a market source said.

The €1 billion 1¾% notes due in 2017 priced at mid-swaps plus 115 bps.

The €1 billion 3% notes due 2021 launched at mid-swaps plus 173 bps.

Barclays, Commerzbank, HSBC, Societe Generale and Unicredit were the bookrunners for the Regulation S deal.

Other details were not immediately available on Tuesday.

Issuance from Shinhan

South Korea's Shinhan Bank sold $500 million floating-rate notes due 2017 (A1/A/) at par to yield Libor plus 65 bps, a market source said.

The notes were talked at a spread in the 70 bps area.

BofA Merrill Lynch, BNP Paribas, Credit Agricole, Citigroup, JPMorgan and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal. Mizuho Securities, Shinhan Asia and Shinhan Investment Corp. were the other leads.

SECO gives guidance

Saudi Arabia's SECO set talk for a two-tranche issue of dollar-denominated and benchmark-sized notes due in 10 and 30 years, a market source said.

The dollar benchmark notes due in 10 years were talked at a yield in the 4 1/8% area.

The dollar benchmark notes due in 30 years were talked at a yield of 5½% to 5 5/8%.

Deutsche Bank, HSBC and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

Costa Rica sets talk

Costa Rica set initial talk in the low-7% area for its upcoming issue of dollar-denominated and benchmark-sized bonds due in 30 years (Baa3/BB/BB+), a market source said.

BofA Merrill Lynch and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S transaction.

The proceeds will be used to refinance debt.

KT plans roadshow

South Korea-based telecommunications company KT will set out on Thursday to market a possible issue of dollar-denominated notes, a market source said.

The roadshow will take place in Asia, Europe and the United States.

A Rule 144A and Regulation S deal may follow.

Avianca plans new issue

Colombia-based airline holding group Avianca will reopen its issue of dollar-denominated 8 3/8% notes due in 2020, according to a company announcement.

The new issue will total up to $250 million and the proceeds will be used for general corporate purposes, including the financing of the company's fleet modernization plan.

Avianca Holdings SA, Grupo Taca Holdings Ltd. and Avianca Leasing LLC will act as co-issuers.

Lineas Aereas Costarricenses SA, Taca International Airlines SA and Transamerican Airlines SA will act as guarantors.

Aerovias del Continente Americano S.A. Avianca will act as guarantor to Avianca Leasing obligations in an amount of up to two-thirds of the offering, the announcement said.

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