New deals from Poland, Ghana, Turkcell; mixed session for EM; Asia stays strong, Brazil suffers

By Christine Van Dusen

Atlanta, Oct. 7 – Poland, Ghana and Turkcell Iletisim Hizmetleri AS sold notes on a mixed Wednesday for emerging markets assets, with Asian bonds putting in a strong session while Latin American bonds, led by Brazil, moved wider.

"The last days have been strong markets, with EM risk rebounding," a trader said. "We still think that risks remain to the downside going forward, however."

Flows for Asian bonds were "healthy, with mostly buyers throughout the day," another trader said. "But there was some profit-taking into the close, taking us off the tights. Sovereigns remain wild."

Bonds from the belly of the Indonesia curve were up as much as 1¾ points at the highs but sold off late in the day as a result of profit taking and a release showing a fall in foreign reserves, he said.

"The long end was up 2 points to 2½ points, closing up 1¼ points, with the 2042s and 2043s outperforming," he said.

From Latin America, Brazil-based Vale SA improved in trading but saw little buying, a New York-based trader said.

"But they will, as Vale has lagged the uptrade due to plunging iron ore, which has since stabilized from Friday," he said.

Brazil was once again in the news, this time after the National Congress again postponed its vote on whether to overrule the president's vetoes of two spending bills.

"Massive reversal in Brazil," a trader said.

At the close on Wednesday, low-beta spreads from Latin America widened, with Brazil leading the way wider and lower, another trader said.

Brazil's five-year credit default swap spreads fell to 445 bps from 410 bps, and Mexico's moved to 160 bps from 150 bps, he said.

"Cash prices were better offered throughout the session, as it looked as if some profit taking was kicking in after this run higher," he said.

LatAm in focus

High-yield names from Latin America were mixed, with Argentina moving higher and Venezuela unchanged, a trader said.

The outperformance of Uruguay's 2024s became "more muted, as they became increasingly rich versus the curve," another trader said.

Panama bonds saw few prints as prices continued to gap higher, he said. And Peru saw its prices climb, with the belly of the curve outperforming.

Meanwhile, Colombia's Ecopetrol SA was a standout after putting in a "breakout day" on Tuesday, another trader said.

Ghana sells notes

Ghana on Wednesday priced a $1 billion issue of 10¾% amortizing notes due 2030 at par to yield 10¾%, a market source said.

The notes were talked at a yield in the 11% area.

The notes have a 14-year weighted average life with three equal redemption payments in October 2028, 2029 and 2030.

Barclays, Deutsche Bank and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to refinance domestic and external debt and for general budgetary purposes.

The new bonds are unique, given the unconditional guarantee from the International Development Association, a trader said.

"The bonds will not be eligible for inclusion in JPMorgan’s EMBI index, as such guaranteed papers are excluded," he said. "This will therefore skew demand from investors downwards."

Turkcell prices dollar bonds

In its new deal, Turkey's Turkcell sold $500 million of 5¾% notes due 2025 at 98.509 to yield 5.95%, a market source said.

The notes were talked at a yield in the 6¼% area.

BNP Paribas Securities Corp., Citigroup Global Markets Inc. and HSBC Securities were the bookrunners for the Rule 144A and Regulation S deal.

The mobile phone company is based in Istanbul.

Poland prints new bonds

Poland sold €1.75 billion of 0.875% notes due Oct. 14, 2021 at 99.623 to yield 0.94%, a market source said.

Barclays, Santander, Societe Generale CIB and UniCredit were the bookrunners for the Regulation S deal.

ICBC sets roadshow

In other deal-related news, China's ICBC Financial Leasing Co. Ltd. will set out on Thursday for a roadshow to market a dollar-denominated issue of notes, a market source said.

ICBC, Goldman Sachs, Morgan Stanley, Citigroup and BofA Merrill Lynch are the joint global coordinators and, along with Wells Fargo Securities and ANZ, joint bookrunners for the Rule 144A and Regulation S deal.

The roadshow will be held in Singapore, Hong Kong and the United States.

The leasing company is based in Beijing.

Hrvatska Elektroprivreda ahead

Croatia's Hrvatska Elektroprivreda dd is looking to issue dollar-denominated notes as part of a tender offer for its $500 million 6% notes due Nov. 9, 2017, according to a company announcement.

Banca IMI, Morgan Stanley and UniCredit are the bookrunners for the new Rule 144A and Regulation S notes.

The Zagreb, Croatia-based issuer is the national power company.

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