Socar, VEB, Votorantim Cimentos, Homex sell bonds on 'constructive' day for EM assets

By Christine Van Dusen

Atlanta, Feb. 2 - The State Oil Co. of the Azerbaijan Republic (Socar), Russia's VEB Finance plc, Brazil's Votorantim Cimentos SA and Mexico's Desarrolladora Homex SAB de CV sold notes on a busy Thursday for emerging markets assets.

"Emerging markets remain dominated by the new issue frenzy right now," a London-based trader said. "Cash bonds all are feeling a little heavy."

In trading, Abu Dhabi-based developer Aldar Properties PJSC saw its 2014 notes move back to where they were on Monday, at about 110.18 bid, 110.68 offered.

"Net-net, it was another fairly constructive day, although definitely in the afternoon the flow and Street action turned more two-way," a trader said. "It's another solid day, activity-wise."

He noted some interest in Qatar sovereign bonds. "They're still wider on the month but having a very good five to seven days versus U.S. Treasuries," he said.

Also active was International Petroleum Investment Co., particularly its 2017s, 2020s and 2022s. "The 2021s continue their run, approaching par," he said.

And the recent $400 million five-year sukuk notes from MAF Sukuk Ltd. - a unit of Dubai-based developer Majid Al-Futtaim Holding - that priced at par were seen trading at between 100.875 and 101 on Thursday.

"Bahrain continues to trade well," he said. "It's not reflected in the week and month changes but the 2018s and 2020s have some decent support at the moment."

He also saw some two-way action for Sharjah Islamic Bank's 2016s. "I think it looks OK versus the peer group," he said. "And names from Dubai see more buyers around. The Dubai 2020s are trading in the high 107s."

Votorantim Cimentos prices

In its new deal, Brazil-based cement company Votorantim Cimentos priced a $500 million tap of its existing 7¼% notes due April 5, 2041 at 99.386 to yield 7.3%, or Treasuries plus 432.2 basis points, a market source said.

The notes priced in line with talk, set at the 7.45% area.

Bank of America Merrill Lynch, JPMorgan and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes.

The original issue totaled $750 million.

Socar prices notes

Azerbaijan's Socar priced a $500 million issue of notes due Feb. 9, 2017 at par to yield 5.45%, a market source said.

The notes priced in line with talk, set at the 5½% area.

Citigroup, Deutsche Bank and RBS were the bookrunners for the Regulation S deal.

Socar is a state-owned oil and gas company based in Baku, Azerbaijan.

The final book was in excess of $4 billion, a source said.

"It's raining new issues," a trader said.

VEB sells bonds

In another new deal, Russia's VEB Finance priced a $750 million issue of notes due Feb. 13, 2017 at par to yield 5 3/8%, or Treasuries plus 466.3 bps, a market source said.

The notes were talked in the 5½% area.

BNP Paribas, JPMorgan, Morgan Stanley and RBS were the bookrunners for the Rule 144A and Regulation S deal.

The notes are guaranteed by Moscow-based lender Vnesheconombank.

And Mexican construction and real estate company Homex priced $400 million 9¾% notes due March 25, 2020 at 98.592 to yield 10%, a market source said.

The notes were talked at a yield in the 10¼% area.

Credit Suisse and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S notes. Proceeds will be used for debt refinancing.

Lotte, Cabcorp set price talk

Also on Thursday, South Korea's Lotte Shopping Business Management (Hong Kong) Ltd. set price talk in the low 4% area for its planned renminbi-denominated issue of benchmark three-year notes, a market source said.

Deutsche Bank and HSBC are the bookrunners for the Regulation S notes, which are expected to price this week.

Proceeds will be used for general corporate purposes.

The notes are guaranteed by Lotte Shopping Co. Ltd., a Seoul, South Korea-based retail company.

And Guatemala's Central American Bottling Corp. (Cabcorp) talked its $200 million issue of notes due 2022 at 7% to 7 1/8%, a market source said.

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

Banco Estado sells notes

South Korea-based lender Busan Bank set price talk at Treasuries plus 355 bps for its planned dollar-denominated issue of benchmark-sized notes due February 2017, a market source said.

Citigroup, Credit Agricole and UBS are the bookrunners for the Regulation S-only deal.

This news followed the late-Wednesday pricing of Santiago, Chile-based lender Banco del Estado de Chile's $500 million issue of 3 7/8% notes due Feb. 8, 2022.

The notes came to the market at 98.314 to yield Treasuries plus 225 bps via Citigroup, Deutsche Bank and HSBC in a Rule 144A and Regulation S transaction.

Proceeds will be used for general corporate purposes.

Yapi Kredi does deal

Also on Wednesday, Turkey-based lender Yapi ve Kredi Bankasi AS priced a $500 million issue of 6¾% senior notes due Feb. 8, 2017 at 98.96 to yield 7%, or Treasuries plus 627.6 bps, a market source said.

The notes priced at the low end of talk, set at 7% to 7 1/8%.

JPMorgan, Standard Chartered and Unicredit were the bookrunners for the Rule 144A and Regulation S deal.

"The new Yapi five-year comes at 7% and sees huge retail investor demand on the follow," the London trader said. "It has been just incredible. There has been more than $20 million from dedicated EM accounts and yet we've seen close to $50 million of retail demand, which explains why it's still up a half-point."

Sberbank oversubscribed

The final book for Russia-based lender Sberbank's recent two-tranche issue of $1.5 billion notes due 2017 and 2022 was $4.7 billion, a market source said.

The deal included $1 billion 4.95% notes due Feb. 7, 2017 that priced at par to yield Treasuries plus 424.2 bps. That tranche attracted $2.6 billion in orders, with 26% from Europe, 23% from the United Kingdom, 17% from Russia, 16% from Switzerland, 8% from the United States, 7% from Asia and 3% from others.

Asset managers accounted for 34%, banks 33%, private banks and retail 11%, hedge funds 9%, pension and insurance 4% and others 9%.

The second tranche totaled $500 million 6 1/8% notes due Feb. 7, 2022 that priced at par to yield 6 1/8%, or Treasuries plus 432.8 bps. The final book was $2.1 billion, with 47% of the orders from the United States, 26% from the United Kingdom, 14% from Europe, 6% from Switzerland, 4% from Russia, 2% from Asia and 1% from others.

Asset managers accounted for 61%, hedge funds 15%, pension and insurance 10%, banks 8%, private banks and retail 4% and others 2%.

Barclays Capital, BNP Paribas, Citigroup and Troika Dialog were the bookrunners for the Rule 144A and Regulation S deal.

"The new Sberbank curve is also under pressure," a trader said.

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