ENAP, China Hongqiao price notes; sentiment gets a boost from ECB; deal pipeline perks up

By Christine Van Dusen

Atlanta, Oct. 27 – Chile’s Empresa Nacional del Petroleo (ENAP) and China Hongqiao Group Ltd. priced notes on a slightly better Monday for emerging markets assets, though bonds from the Middle East were quiet or wider.

“Sentiment has benefitted from the European Central Bank stress test results, and we also have the Federal Open Market Committee later this week, with consensus largely pointing to little change in tone,” a London-based analyst said.

Also contributing to the better tone on Monday: Standard & Poor’s affirmed Russia’s BBB- and negative outlook rating.

“Elsewhere, flows have been relatively limited so far this morning, but spreads are generally a little tighter, helped by the Treasury move,” he said.

For bonds from the Middle East, it was a “lackluster session,” a London-based trader said.

Decent demand was seen for Dubai Electricity and Water Authority’s 2020s while sellers focused on the rest of the company’s curve, he said.

“Qatar was a little quiet overall,” he said. “Qtel still feels popular.”

Perpetual bonds were among the most active from the region, with better buyers noted for Emirates Islamic Bank, Abu Dhabi Islamic Bank and Global Education Management Systems.

“In Bahrain, the 2044s are outperforming the 2022s and 2023s over the month by 10 basis points to 15 bps,” he said. “High-yield names were slightly better-bid, if anything.”

From Latin America, bonds from Brazil-based Petroleo Brasileiro started out 10 bps wider before tightening, a New York-based trader.

“The long end was about 4 bps to 5 bps tighter, and the 2043s are still the outperformer, about 10 bps tighter so far,” he said.

Lat-Am in focus

Other bonds from Brazil were mixed, with Gerdau SA trading higher, Braskem SA firming and Odebrecht SA lagging, the New York trader said.

The new notes from Chile’s SACI Falabella – 4 3/8% notes due 2025 that priced at 99.932 – were seen Monday at 100½ bid.

The notes came to the market last week at a yield of 4.384%, or Treasuries plus 215 bps, with JPMorgan, Credicorp and Scotiabank in a Rule 144A and Regulation S deal.

And Chile-based Sociedad Quimica y Minera de Chile SA’s (SQM) recent 4 3/8% notes due 2025 that priced at 99.41 traded Monday at 99.45, he said.

The notes priced to yield Treasuries plus 215 bps with Scotiabank, BofA Merrill Lynch and JPMorgan in a Rule 144A and Regulation S deal.

ENAP prints bonds

Chile’s ENAP priced $600 million 4 3/8% notes due Oct. 30, 2024 at 99.328 to yield Treasuries plus 220 bps, a market source said.

The notes were talked at a spread in the 230 bps area.

HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to refinance debt.

ENAP is a Las Condes, Chile-based hydrocarbon exploration, production and marketing company.

Hongqiao Group sells bonds

China Hongqiao Group printed a $300 million issue of 6 7/8% notes due May 3, 2018 at par to yield 6 7/8%, a market source said.

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

Deutsche Bank was the sole global coordinator. ANZ, BofA Merrill Lynch, BOC International and Morgan Stanley were the other joint bookrunners for the Regulation S deal.

The proceeds will be used for refinancing indebtedness and for working capital and general corporate purposes.

China Hongqiao is an aluminum products manufacturer based in Zouping County, Shandong, China.

China Travel launches two tranches

China Travel Service (Holdings) Hong Kong Ltd. launched a $1 billion two-tranche issue of notes due five and 10 years (expected ratings: Baa3/BBB/), a market source said.

The $300 million notes due in 2019 launched at Treasuries plus 280 bps, wider than talk in the 245 bps area.

The $700 million notes due in 2024 launched at Treasuries plus 375 bps, wider than talk in the 350 bps area.

HSBC and UBS are the joint global coordinators and HSBC, UBS, CCB International and ABC International were the joint bookrunners and joint lead managers for the Regulation S deal.

The proceeds will be used to refinance existing borrowings, replenish working capital and for other general corporate purposes.

China Travel is a Hong Kong-based owner of various travel-related businesses.

Tewoo launches notes

China’s Tewoo (HK) Ltd. launched $400 million notes due in 2017 (A1) at Treasuries plus 210 bps, a market source said.

The notes were talked at a spread in the Treasuries plus 210 bps to 215 bps area.

ICBC (Asia), BNP Paribas and HSBC were the bookrunners for the Regulation S deal.

The issuer is a Tianjin, China-based company that focuses on commodity trade, logistics, real estate development and other businesses.

Unacem gives guidance

Peru’s Union Andina de Cementos SAA (Unacem) set talk in low-6% area for a benchmark-sized issue of dollar-denominated notes due in seven years, a market source said.

BBVA, Deutsche Bank and Scotiabank are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for financing an acquisition, to refinance existing indebtedness and for general corporate purposes.

The cement and concrete company is based in Lima.

Talk from Global Bank

Panama’s Global Bank Corp. set talk for a $300 million-minimum issue of five-year notes in the high-300 bps area, a market source said.

Citigroup and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

Pricing is expected to take place on Tuesday.

The cement and concrete company is based in Lima.

Loyz Energy sets talk

Singapore’s Loyz Energy Ltd. set talk at 9% for a Singapore dollar-denominated issue of notes due in 2½ years, a market source said.

HSBC and Oversea-Chinese Banking are the bookrunners for the Regulation S deal.

The proceeds will be used for investments, capital expenditure requirements and corporate funding.

Loyz is a Singapore oil and gas exploration and production company.

FirstRand to host calls

South Africa’s FirstRand Bank Ltd. will host a series of investor conference calls to discuss a possible issue of dollar-denominated notes, a market source said.

Citigroup, Mitsubishi UFG and RMB are the bookrunners for the Regulation S deal.

FirstRand Bank is a wholly owned subsidiary of FirstRand Ltd., a financial services company based in Johannesburg, South Africa.

Vietnam picks banks

Vietnam has mandated Deutsche Bank, HSBC and Standard Chartered Bank to lead a roadshow for an issue of notes, a market source said.

The roadshow will begin on Wednesday.

A Rule 144A and Regulation S deal is expected to follow.

Roadshow for Bank of China

Bank of China Ltd. will set out on Friday to market an issue of notes, a market source said.

Bank of China, BofA Merrill Lynch, HSBC and Wells Fargo Securities are the joint global coordinators, joint lead managers and joint bookrunners for the Rule 144A and Regulation S deal.

Credit Agricole CIB, Deutsche Bank, JPMorgan, Mizuho Securities and Morgan Stanley are the joint lead managers and joint bookrunners.

The issuer is a Beijing-based bank.

Korea Expressway postpones

Korea Expressway Corp. postponed dollar-denominated issue of notes due in 3½ years, due to market conditions, a market source said.

The notes were talked at a spread in the Treasuries plus 125 bps area.

BofA Merrill Lynch, Citigroup, Deutsche Bank and Nomura Securities were the bookrunners for the Rule 144A and Regulation S deal.

Korea Expressway runs the toll roads in South Korea.

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