Petrobras prices $11 billion record-breaking deal; Nitrogenmuvek, Frigoglass print bonds

By Christine Van Dusen

Atlanta, May 13 - Brazil's Petroleo Brasileiro SA (Petrobras) priced a whopping $11 billion of notes in six tranches on Monday in the largest deal ever printed by an emerging markets issuer, flooding the market with paper on an otherwise mostly quiet day for the asset class.

Also selling notes during the session were Greece's Frigoglass SAIC and Hungary-based Nitrogenmuvek Zrt. And Commercial Bank of Dubai PSC (CBD) set initial price talk for its upcoming deal, while Singapore's Freight Links Express Holdings Ltd., Indonesia's PT Pertamina and China's Bright Food Group Co. Ltd. took steps toward printing new notes.

"Generally a slow start this morning, with prices opening lower in our markets as they play catch-up with the US Treasury move on Friday," a London-based analyst said.

The Markit iTraxx SovX CEEME ex-EU index spread on Monday tightened 2 basis points to 170 bps over Treasuries.

Bonds from Turkey's long end were down between 1 point and 1¼ points, while emerging European names were down between ¼ point and ½ point.

"Similar story in Russia, with quasi-sovereigns dipping lower and the sovereign 1 bp to 2 bps wider," she said.

Investors are expected to remain interested in the sovereign's 2030s and 2042s this week and demand for corporates will continue, according to a report from UFS Investment Co.

Looking to Ukraine, gains in sovereign bonds have slowed, said Svitlana Rusakova of Dragon Capital.

"Investors were looking for better value spots," she said.

Such value has recently been found in Mriya Agro Holding Public Ltd.'s 2018 notes, which have been sighted up about 1 point on the week, or 34 bps tighter in yield.

Another popular name has been JSC State Savings Bank of Ukraine (Oschadbank), she said. The company's 2016s have moved up 1¼ points and the 2018s up 1½ points.

Petrobras does mega-deal

Brazil-based energy company Petrobras priced a record-breaking $11 billion in global notes due in 2016, 2019, 2023 and 2043 in a Securities and Exchange Commission-registered deal, a market source said.

The deal included $1.25 billion 2% notes due 2016 that priced at 99.584 to yield 2.144%, or Treasuries plus 175 bps. The notes were talked at a spread in the 180 bps area.

Another $1 billion of notes due 2016 priced at par to yield Libor plus 162 bps, following talk in the 167 bps area.

The company also priced $2 billion 3% notes due 2019 at 99.352 to yield Treasuries plus 230 bps. The notes were talked at a spread in the 235 bps area.

A $1.5 billion tranche of notes due 2019 priced at par to yield Libor plus 214 bps, after talk in the 219 bps area.

The notes due 2023 totaled $3.5 billion and carried a 4 3/8% coupon, pricing at 98.828 to yield 4.522%, or Treasuries plus 260 bps. Talk was set in the 265 bps area.

Deal draws orders

The final tranche of the Petrobras deal, $1.75 billion 5 5/8% notes due 2043, came to the market at 98.027 to yield 5.764%, or Treasuries plus 265 bps, following talk in the 270 bps area.

BB Securities, BofA Merrill Lynch, Citigroup, HSBC, Itau BBA, JPMorgan and Morgan Stanley were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for capital expenditures and general corporate purposes.

The notes, issued by subsidiary Petrobras Global Finance BV, had drawn as much as $50 billion of orders by the afternoon in New York.

Nitrogenmuvek sells notes

Hungary-based ammonia and fertilizer company Nitrogenmuvek priced a $200 million issue of 7½% notes due 2020 at 98.011 to yield 7 7/8%, or Treasuries plus 658.1 bps, a market source said.

BNP Paribas and Raiffeisen Bank International were the bookrunners for the Rule 144A and Regulation S deal.

And Greece-based and West Africa-focused glass producer Frigoglass priced a €250 million issue of 8¼% notes due 2018 at par to yield 8¼% via Citigroup and HSBC.

Note proceeds will be used to refinance existing short-term debt maturities.

CBD, Pertamina give guidance

CBD set initial price talk in the mid-swaps plus 275 bps area for its upcoming dollar-denominated issue of benchmark-sized notes due in five years via Citigroup, HSBC and National Bank of Abu Dhabi in a Regulation S deal.

The Dubai-based lender is expected to price the notes on Tuesday.

And Indonesia-based oil and gas company Pertamina gave initial price guidance in the 4½% area for its planned dollar-denominated issue of notes due in 10 years.

Barclays, Citigroup and RBS are the bookrunners for the Rule 144A and Regulation S deal.

Freight Links picks bank

Singapore-based logistics services provider Freight Links has mandated DBS Bank as the bookrunner for an upcoming issue of notes, according to a company announcement.

The deal is part of the company's S$400 million multicurrency medium-term note program.

The proceeds will be used for general corporate purposes, including the refinancing of borrowings, investments and for general working capital.

Bright Food sets talk

China's Bright Food Group gave guidance in the Treasuries plus 250-bps area for a five-year issue of dollar notes, a market source said.

ANZ, Bank of Communications, Barclays, BOCI, HSBC, ING, JPMorgan, National Australia Bank, Rabobank International and RBS are the bookrunners for the Regulation S issue of notes.

Bright Food is a Shanghai, China-based food and beverage manufacturing company.

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