Uruguay, SK Innovation, Codelco do deals; spreads mixed; Norilsk Nickel could issue bonds

By Christine Van Dusen

Atlanta, Aug. 6 - Uruguay, South Korea's SK Innovation Co. Ltd. and Corporacion Nacional del Cobre de Chile (Codelco) priced notes on Tuesday amid mixed spreads and light activity for emerging markets assets.

"US Treasuries are remaining stable in the 2.65% area this morning following a small sell-off on the back of better-than-expected Industrial Supply Management non-manufacturing data yesterday," a London-based analyst said.

The Markit iTraxx SovX CEEME ex-EU index spread on Tuesday opened 2 basis points wider at 228 bps over Treasuries. The Markit iTraxx Crossover index spread - seen Monday at 394 bps - tightened to 387 bps.

"Very muted activity this morning, with Turkey and Central and emerging Europe marginally wider," the analyst said. "[Turkiye Is Bankasi AS (Isbank)] has reported second-quarter 2013 earnings largely in line. We expect little movement on the back of the results."

Sovereign bonds from Ukraine have caught a bid so far this week, said Svitlana Rusakova of Dragon Capital.

"A few issues adjusting slightly higher, yet on hardly any trading action," she said. "In the corporate sector, we saw demand for shorter-dated bonds."

She pointed to Metinvest BV's 2015s and Ferrexpo plc's 2016s.

Meanwhile, the 2018s from Donbass Fuel & Energy (DTEK) were offered at 981/2.

In its new deal, Uruguay sold $2 billion 4½% notes due 2024 at 99.833 to yield Treasuries plus 187.5 bps via Deutsche Bank and HSBC in a Securities and Exchange Commission-registered deal.

The proceeds from the transaction - part of a tender offer - will be used to repay the purchase price of the bonds in the tender offer and for general governmental purposes.

SK prints notes

In its new deal, South Korea-based energy, lubricants and chemicals company SK Innovation priced $350 million 3 5/8% notes due 2018 at 99.638 to yield Treasuries plus 230 bps.

The notes, via Citigroup in a Regulation S deal, were talked at a spread in the 235 bps area.

Codelco sells bonds

Chile-based copper mining company Codelco priced $750 million 4½% notes due 2023 at 99.864 to yield Treasuries plus 187.5 bps, a syndicate source said.

The notes were talked at a spread in the 187.5 bps area.

BofA Merrill Lynch, HSBC and Mitsubishi UFJ were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to pay existing debt, for general corporate purposes and for capital expenditures.

Issuance ahead for Norilsk

Russia's OJSC MMC Norilsk Nickel is planning to issue bonds with bookrunners Barclays, BofA Merrill Lynch, Citigroup, Societe Generale and Sberbank, a market source said.

No other details were immediately available on Tuesday.

The nickel and palladium producer is based in Moscow.

Costa Rica bank issues notes

Late on Monday, San Jose-based Banco de Costa Rica SA priced $500 million 5¼% notes due 2018 at par to yield 5¼%, or Treasuries plus 386 bps, a market source said.

The notes were talked in the mid-5% area.

Barclays and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S transaction.

Alpek does deal

Monday also saw Mexico-based petrochemical company Alpek SAB de CV sell $300 million 5 3/8% notes due 2023 at par to yield 5 3/8%, or Treasuries plus 273.70 bps.

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

The proceeds will be used for general corporate purposes, which may include the repayment or retirement of indebtedness.

China Longyuan draws investors

China Longyuan Power Group Ltd.'s new issue of $300 million 3¼% notes due 2016 was two times oversubscribed, a market source said.

The notes priced at 99.949 to yield Treasuries plus 285 bps via Goldman Sachs, Wing Lung Bank, Citic Securities, UBS, Morgan Stanley and Agricultural Band of China in a Regulation S-only deal.

About 89% of the orders went to non-Japan Asia and 11% to others.

Fund managers picked up 45%, banks 43%, central banks and sovereign wealth funds 6%, private banks 4% and pension funds and insurers 2%.

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