Primary hosts Bulgaria, Ecuador, Peru, Armenia; Asian rally fizzles; several roadshows ahead

By Christine Van Dusen

Atlanta, March 19 – Bulgaria, Ecuador, Peru and Armenia priced notes on Thursday amid a mostly defensive tone for emerging markets assets.

Asian bonds were firm at the start of Thursday’s session after the Federal Reserve’s Wednesday night comments, with spreads tightening between 1 basis point and 3 bps, a London-based trader said.

“However, the rally fizzled, with sellers into strength, and high-grade cash closed the day unchanged,” he said. “Tone, overall, feels defensive.”

Recent new issues were mixed, with Industrial and Commercial Bank of China Ltd.’s five-year notes closing unchanged and Malaysia-based Petroliam Nasional Bhd.’s (Petronas) curve rallying 1 bp to 3 bps tighter amid profit-taking.

The latter deal included $1.25 billion 2.707% Islamic bonds due 2020 that priced at par to yield Treasuries plus 110 bps. On Thursday the notes were seen at 115 bps, down from Wednesday’s 116 bps.

And the $1.5 billion 4½% notes due 2045 that priced at 98.767 to yield Treasuries plus 190 bps traded down to the wides of 206 bps but rebounded up to 203 bps with buyers from Europe, he said. The notes were spotted Wednesday at 205 bps bid, 202 bps offered.

BofA Merrill Lynch, CIMB and Deutsche Bank were the bookrunners for Regulation S deal.

Oil companies from China were mostly unchanged to a couple of basis points tighter, he said.

In deal-related news, Indonesia’s PT Astra Sedaya Finance, South Korea’s Shinhan Bank and Korea Resources Corp. set roadshows while National Bank of Kuwait looked to issue in April. Market sources were also whispering about a possible issue from Senegal.

Asia in focus

Financial corporates from Asia suffered the most, the trader said, while other corporates held in better amid real-money demand.

Among high-yield Asian companies, Chinese property developers saw their bonds close on Thursday about ½ point to ¾ point higher, he said.

Meanwhile, the Philippines curve was up 1½ to 2 points and 2 bps to 4 bps tighter on spread, he said.

“Korea was quiet,” he said. “India underperformed, with spreads 3 bps to 8 bps wider.”

Bulgaria sells bonds

Bulgaria priced a €3.1 billion three-tranche issue of notes due 2022, 2027 and 2045, a market source said.

The €1.25 billion 2% notes due in 2022 priced at 98.849 to yield 2.179%, or mid-swaps plus 180 bps. Talk was set in the 190 bps area.

The €1 billion 2 5/8% notes due 2027 priced at 98.918 to yield 2.732%, or mid-swaps plus 210 bps. Talk was set in the 220 bps area.

And the €850 million 3 1/8% notes due 2045 priced at 97.982 to yield mid-swaps plus 245 bps after talk in the 255 bps area.

Citigroup, HSBC, Societe Generale CIB and UniCredit were the bookrunners for the Regulation S deal.

Issuance from Ecuador

Ecuador sold $750 million 10½% notes due 2020 at par to yield 10½%, a market source said.

Citigroup was the bookrunner for the Rule 144A and Regulation S deal.

Peru prices tap

Peru priced a $545 million tap of its 5 5/8% notes due 2050 (A3/BBB+/BBB+) at 115.378 to yield 4.278%, or Treasuries plus 220 bps, a market source said.

The notes were talked at a spread in the Treasuries plus 237.5 bps area.

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

The proceeds will be used to refinance a portion of the sovereign’s general financial requirements for 2016.

The sovereign is also planning a tap of its 6.95% Peruvian nuevo sol-denominated notes due 2031 (expected ratings: A3/A-/A-), a market source said.

The 2031 notes were talked at a yield in the 7% area.

BBVA, Deutsche Bank and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S transaction.

Issuance from Armenia

Armenia priced a $500 million issue of 7.15% notes due 2025 (Ba3//B+) at 97.568 to yield 7½%, or mid-swaps plus 543.7 bps, a market source said.

The notes were talked at a yield in the 7 5/8% area.

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

Astra Sedaya sets roadshow

Indonesia’s Astra Sedaya Finance will set out on Friday for a roadshow to market a dollar-denominated issue of notes, a market source said.

HSBC, DBS, Mizuho Securities and MUFG are the bookrunners for the Regulation S roadshow.

Roadshow for Shinhan Bank

South Korea’s Shinhan Bank has set another roadshow for a possible issue of notes, a market source said.

Credit Agricole CIB and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will begin on March 26.

The Seoul-based lender previously held a roadshow on March 16 with BofA Merrill Lynch and JPMorgan.

Korea Resources plans trip

Korea Resources will depart on March 24 for a roadshow to market a possible issue of notes, a market source said.

The roadshow will start in Singapore and travel to Hong Kong, London, Boston and New York before concluding on April 1 in Los Angeles.

Korea Resources is a mining company based in Seoul.

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