Slovenia prices taps; new South Africa notes flat to slightly higher; KazTranzGas weaker

By Rebecca Melvin

New York, Sept. 20 – The Republic of Slovenia priced €700 million additional notes due March 22, 2027 and Nov. 3, 2040 on Wednesday, representing its third tap of those issues and bringing the amount outstanding in that Regulation S paper to $3 billion each.

The Slovenia €200 million 1¼% notes due 2027 priced at 102.194 to yield mid-swaps plus 20 basis points, and the Slovenia €500 million 1¾% notes due 2040 priced at 94.468 to yield mid-swaps plus 55 bps.

Also expected to price were planned taps of Russia’s 4¼% notes due 2027 and 5¼% notes due 2047. Those issues were not heard to have priced by Prospect News’ deadline. But, as previously reported, the sovereign plans to issue as much as $4 billion of new Regulation S bonds in deals tied to tenders for its 11% bonds due 2018, of which $4,466,398,000 remains outstanding, and its 7½% bonds due 2030, of which $10,715,179,211 remains outstanding.

Elsewhere, South Africa’s $1 billion of new 10-year notes and $1.5 billion of new 30-year notes were trading flat to slightly better upon release for secondary market action early Wednesday, according to a market source.

The new South Africa 4.85% notes due 2027 were seen 99.88 bid, 100.08 offered, and the new 5.65% notes due 2047 were at 100.12 bid, 100.37 offered. Both deals were priced at par with yields at issue just slightly tighter than those talked.

The new issue of KazTransGas slipped to about 99¼ in early trade, but was seen later at 99½ after the Kazakhstan gas supply company priced $750 million of the 4 3/8% 10-year notes at 99.799 on Tuesday.

The KazTransGas notes priced right where they had been talked. The slip upon release for secondary market action suggests a slightly weaker market follow on Tuesday when three new emerging markets deals slipped in first-day trading after those issues priced at terms that were tight compared to initial talk.

Wednesday’s primary market still had some steam however. It was announced that Mexico’s Mexichem SAB de CV was slated to begin investor meetings Wednesday for an offering of dollar-denominated notes and Cydsa SAB de CV plans to offer up to $370 million of up to 10-year senior unsecured debt (expected rating: //BB+).

Mexichem and Cydsa are both industrial company involved in chemicals.

Emerging markets were cautious ahead of news from the U.S. central bank, which said Wednesday afternoon that it plans to begin shrinking its balance sheet slowly starting in October. The U.S. Federal Reserve has a $4.5 trillion portfolio of Treasuries, mortgage-backed securities and other assets, acquired for the most part during its accommodation policies aimed at shoring up the economy following the 2008 financial crisis.

The Fed also left open the possibility of raising short-term interest rates again in December. But while Fed Chairman Janet Yellen said that she believes the recovery is on a strong track, many question a December rate hike as inflation has remained persistently below its 2% target rate.

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