Mexico prices $1.88 billion deal; Jordan guides 30-year notes; Cydsa sells 10-year notes

By Rebecca Melvin

New York, Oct. 2 – Emerging markets began the fourth quarter on Monday in much the same way it closed out September and the third quarter last week, with more new deals, including two 30-year sovereign deals from Mexico and Jordan.

Also pricing was Cydsa SA de CV’s new $330 million issue of 10-year notes. And Docuformas SAPI de CV was heard in the market with a small deal of five-year notes talked at a 9½% yield. Final terms for the Mexican financial services company’s deal could not be confirmed by Prospect News’ deadline.

There were also a couple of deals on roadshow, including Brazil’s Aegea Saneamento, which was wrapping up meetings on a $400 million deal of seven-year notes on Monday.

The Middle East, including new paper from Jordan, was the market’s main focus, however, a New York-based said of Monday’s session.

Jordan launched a dollar benchmark early Monday that was later talked at $1 billion in size with a yield of 7½%.

The Jordan paper followed on the heels of last week’s Middle East offerings, which the market was still digesting, including $12.5 billion of notes from Saudi Arabia.

Meanwhile, Mexico also launched a dollar benchmark, which later priced as a $1.88 billion deal, with a 4.6% coupon.

Mexico’s deal did not prompt a notable amount of trading in the sovereign’s existing curve, a trader said. Instead, Brazil and Petroleo Brasileiro SA (Petrobras) were a focus and traded actively, he said.

Jordan notes attractive

The Jordan 2047 notes were seen having fair value in the 7.3% to 7.4% area given a z-spread at 475 basis points to 485 bps, according to MUFG credit strategist Trieu Pham.

The estimate was based on comparisons of similarly rated credits such as Bahrain and Egypt and with additional spread added between the 10-year and 30-year bond ranges of between 90 bps and 110 bps, Pham wrote in a note.

Demand for the new Jordan paper brought $4.3 billion of orders.

Jordan and Lebanon are close in terms of economic size, debt levels, the Syrian crisis and fiscal and current account deficits, Pham noted. Yet, it is comparisons between Jordan and Egypt that are helpful, in that while they both have debt levels, they benefit from IMF programs and other support from international investors.

Jordan has two existing notes including its 6 1/8% notes due 2026, which were indicated bid around 101 with a 5.9% yield on Monday, and the Jordan 5¾% notes due 2027, which were bid at about 98.3 with a 6% yield. That compared to Egypt’s 7½% notes due 2027 that were bout 108.7 with a 6.3% yield and the Egypt 8½% notes due 2047 that were seen at 111.4 bid with a 7½% yield.

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