Hutchison Whampoa, Vale lead high-grade emerging markets action; EMBI-Plus tightens by 11 bps

By Paul A. Harris

St. Louis, Sept. 8 - The emerging markets primary burst out of the gate trailing the three-day Labor Day weekend in the United States.

China's Hutichson Whampoa Ltd. and Brazil's Vale Overseas Ltd. priced a combined $4 billion of high-grade corporates.

There was also an assortment of new deal announcements.

The EMBI+ index closed the day at 354 bps bid, 11 bps tighter on the day, according to an investor.

People are willing to put money to work in the new issue market because they have a lot of cash, the investor commented.

Hutchison prices $3 billion

Hutchison Whampoa priced $3 billion of notes (A3/A-) in two tranches on Tuesday.

The Chinese conglomerate priced $2 billion of 4 5/8% six-year notes at Treasuries plus 227.5 bps, and $1 billion of 5¾% 10-year notes at Treasuries plus 335 bps.

Both tranches came on top of the price talk.

Barclays Capital, HSBC and Deutsche Bank Securities led the Rule 144A deal.

News of the deal caused Hutchison's existing 7 5/8% senior notes due April 2019 to trade lower in the European session, according to a market source, who had them spotted at 225 bps bid, 218 bps offered.

Vale brings $1 billion

Elsewhere in Tuesday's primary market, Vale priced $1 billion of 5 5/8% 10-year fixed-rate notes (Baa2/BBB+/BBB) at a 225 bps spread to Treasuries on Tuesday.

The deal came on top of price talk.

Goldman Sachs & Co., HSBC and Banco Santander were the bookrunners for the general corporate purposes deal from the Rio de Janeiro, Brazil-based metals and mining company.

Axtel announces deal

Mexico's Axtel, SAB de CV will begin a roadshow on Friday in New York for a dollar-denominated offering of senior unsecured notes (Ba2/BB-/BB).

Roadshow stops include London on Sept. 14 and Boston on Sept. 15. The roadshow wraps up with presentations in Los Angeles and San Francisco on Sept. 16.

The deal's size and structure remain to be determined, according to the source. However the notes are expected to come with either a 10-year tenor, featuring five years of call protection, or a seven-year tenor with four years of call protection.

Bank of America Merrill Lynch and Credit Suisse are joint bookrunners for the telecommunications company's debt refinancing and general corporate purposes deal.

CSN size, structure emerge

Brazilian steel firm Companhia Siderurgica Nacional started a roadshow on Tuesday in London for an expected $750 million offering of 10-year senior notes (Ba1/BB+/BBB-), according to a market source.

Although there is no official price talk the notes are expected to print with a yield of between 7% and 7½%, the source added.

Roadshow presentations will continue on Wednesday in London, on Thursday in New York, on Friday in Boston and on Monday in Los Angeles.

Morgan Stanley and Banco Itau are joint bookrunners.

Pricing is subject to market conditions.

Central European Media starts roadshow

Central European Media Ltd. started a roadshow in London on Tuesday for a €150 million offering of seven-year senior secured notes (expected ratings B2/B), according to a market source.

The deal is expected to price later this week.

Deutsche Bank Securities, Bank of America Merrill Lynch and BNP Paribas are joint bookrunners for the Rule 144A/Regulation S offering.

The notes come with four years of call protection.

Proceeds will be used to repay the €127.5 million loan agreements with the European Bank for Reconstruction and Development, as well as to repurchase a portion of the company's 8¼% senior notes due 2012 or repay other debt.

The company is based in the Czech Republic.

Abu Dhabi National Energy mandates five banks

Abu Dhabi National Energy Co. mandated five banks to run its benchmark-sized, dollar-denominated offering of notes, according to a market source.

BNP Paribas, HSBC, Mitsubishi UFJ Securities, Morgan Stanley and Standard Chartered Bank will act as joint bookrunners for the Rule 144A/Regulation S offering.

Timing of the deal has not yet been announced. Pricing is subject to market conditions.

Moody's Investors Service assigns its Aa2 issuer rating to the company which is 72.1% indirectly owned by the government of Abu Dhabi.

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