Issuers line up roadshows for upcoming issues; JBS gives price guidance; flows balanced

By Christine Van Dusen

Atlanta, Jan. 24 - JBS USA LLC and JBS USA Finance Inc. set price talk on Tuesday for their upcoming dollar-denominated notes while several other emerging market issuers - including Caucedo Investments Inc., Mexico-based Urbi Desarollos Urbanos SAB de CV, Dubai-based Majid Al-Futtaim Holding and Mexico's Grupo Elektra SAB de CV - planned roadshows for new deals.

The morning also saw more buying than selling in the secondary market.

"There's still no real selling of EM risk yet," a London-based trader said during the European morning. "There's light selling in the benchmarks but overall, cash bonds are opening very firm still."

Russia's quasi-sovereign bonds remained in focus for retail investors, he said.

"Vnesheconombank's 2017s are now trading over 60 basis points inside the level where their new deal was pulled last time, so perhaps that gets reignited once Sberbank is done," he said.

Turkey's banks were also of interest during trading while the sovereign's bonds were 10 bps wider on thin trading and Ukraine's bonds were 15 bps wider.

By the European afternoon, flows were evenly balanced.

"Many bonds have reached clearing levels," another trader said. "As opposed to the second half of last week and most of Monday, where it was one-way flow, it feels like there's a little more depth to the offer and I definitely saw some paper coming out."

Middle East in focus

In other trading, Lebanon remained "a rock," another trader said.

And First Gulf Bank's 2017s were seen at 100.35 bid, 100.50 offered.

"That's 16 bps tighter," he said.

Kuwait's Kipco was in demand, with its 2016s about 50 bps better on the week.

"It was a very active day, flow-wise, with plenty of interest in the usual suspects like Qatar, International Petroleum Investment Co. and Abu Dhabi National Energy Co.," he said. "Bahrain and Dubai still retain a pretty solid bid."

South Africa in demand

Looking to Africa, some trading was seen for Eskom Holdings' 2013s. And demand was noted for South Africa's 2024s.

"If you had the short Nigeria and long Egypt 2020 trade on today you did well. Egypt's 2020s are going out at 91 bid, so over 110 bps tighter on the week - impressive," he said. "Otherwise, paper felt offered for the most part, especially Namibia and Nigeria. We also managed to trade some African Export-Import Bank 2016s."

JBS sets talk

For its planned deal, JBS USA set price talk for a $400 million issue of notes due 2020 at 8½% to 8¾%, a market source said.

JPMorgan, BB Securities, Bradesco BBI, Rabobank, Santander and Wells Fargo are the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used to repay debt at parent JBS SA, a Sao Paulo-based processor of beef, pork and lamb.

And Colombia-based banking group Grupo Aval Ltd. set the size at benchmark and the tenor at five years for its planned issue of dollar notes, a market source said.

Goldman Sachs, JPMorgan and Corficolombiana are the bookrunners for the Rule 144A and Regulation S deal, which is expected to price this week.

Proceeds will be used for general corporate purposes, which may include acquisitions and prepaying outstanding debt.

Roadshows for Caucedo, Urbi

In other deal-related news, Caucedo Investments - which operates port terminals in the Caribbean and the Dominican Republic - has mandated Bank of America Merrill Lynch, Citigroup and JPMorgan for a roadshow starting Thursday, a market source said.

The marketing trip is expected to begin in New York and travel to Los Angeles, Santiago and London before concluding on Jan. 31 in Boston, Geneva and Zurich.

A Rule 144A and Regulation S transaction could follow, subject to market conditions.

And Mexican homebuilder Urbi Desarollos Urbanos has mandated Credit Suisse, Citigroup, Santander and BBVA for a roadshow in Europe and the United States, a market source said.

The roadshow is expected to begin on Wednesday.

A Rule 144A and Regulation S offering of dollar notes may follow.

Majid Al-Futtaim ahead

Also planning a marketing trip is Dubai-based developer Majid Al-Futtaim Holding, which plans a five-year issue of sukuk notes, a market source said.

"Majid Al-Futtaim has resurrected its sukuk deal and will hit the road for some presentations," a trader said.

The Regulation S issue is expected to total $350 million to $500 million and come to the market via Abu Dhabi Islamic Bank, Dubai Islamic Bank, HSBC and Standard Chartered.

And Mexico-based finance and retail corporation Grupo Elektra has mandated BCP Securities, Jefferies and UBS for a roadshow starting Thursday, a market source said.

The marketing trip is expected to begin in New York, Zurich and Lima, Peru, and travel to Geneva and Santiago, Chile, before concluding on Jan. 30 in Miami, London and Mexico City.

A Regulation S-only dollar deal may follow.

Odebrecht Finance sells bonds

All of this news followed the Monday pricing of Brazil-based construction company Odebrecht Finance Ltd.'s $300 million add-on to its 6% notes due April 5, 2023. The deal came to the market at 100.394 to yield 5.95%, or Treasuries plus 389.7 bps, a market source said.

Deutsche Bank, Credit Suisse and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes.

The original $500 million issue priced at par in March 2011.

Israel oversubscribed

The final book for Israel's $1.5 billion issue of 4% notes due June 30, 2022 was $5.8 billion with more than 300 accounts involved, a market source said.

The notes came to the market at 99.036 to yield 4.115%, or Treasuries plus 205 bps via Barclays Capital, Goldman Sachs and UBS in a Securities and Exchange Commission-registered deal.

About 48% of the orders came from Europe, 42% from the United States, 8% from Israel and 2% from Asia.

Funds accounted for 40%, banks 30%, private banks 18%, insurers 5% and others 4%.

"This is their first benchmark transaction since 2010. It's not offering much value versus five-year credit default swaps," a trader said. "It's off half a point."

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