Primary hosts Petrobras, Kexim, CAF deals; buyers for Turkey; perpetuals a 'mixed bag'

By Christine Van Dusen

Atlanta, Jan. 7 - Brazil's Petroleo Brasileiro SA (Petrobras), Export-Import Bank of Korea (Kexim) and Venezuela's Corporacion Andina de Fomento (CAF) sold notes on Tuesday, joining the growing list of new issues from Latin America and Asia that have helped to wake retail investors from their holiday-related slumbers.

Several other issuers took steps toward the market, including China's KWG Property Holding Ltd. and Indonesia.

"A relatively strong open in our markets," a London-based analyst said. "Turkey has seen buyers."

This came on the heels of news that more arrests have been made as a result of the corruption scandal in Turkey.

"In Russia, the Sberbank curve is trading up along with Rosneft," the analyst said.

Bonds from the Middle East and North Africa received support during the session, though activity was somewhat quieter than on Monday, she said.

"Expectations continue to focus on issuance, and with other EM regions already off the block, it is likely only a matter of time before new deals resume," she said.

The 2037 notes from Dubai-based DPWorld were popular, closing up a point with no good demand on Tuesday, a London-based trader said.

"Perpetuals were a mixed bag, with buyers for Emirates Islamic Bank and Global Education Management Systems Ltd. and more balanced activity on the others," he said. "Saudi Electricity Co., if anything, is lagging its peer group, with bonds 3 basis points to 4 bps tighter on the month."

Sabic Capital's 2018s have narrowed about 8 bps on the week, he said, and bonds in the Bahrain space were well bid.

"Qtel is still popular," he said. "The 2025 dollar notes are back to par and the 2028s and 2043s have a bid. Qtel's 2018s are closing a couple better, and I still think they can perform OK."

Meanwhile, Saudi Arabia's Dar Al-Arkan Real Estate Development Co. saw its bonds "struggling a little," he said.

"So, net-net, the year has started off as she typically - and predictably - does, with a strong secondary bid, the majority of spreads performing well over the week and month and the syndicate desks sharpening their pencils," he said.

Petrobras prices notes

Brazil-based energy company Petrobras priced a multi-tranche issue of €3.05 billion notes due 2019, 2021 and 2025 and £600 million notes due 2034, according to a company filing.

The deal included €1.5 billion notes due 2019 that priced at 99.705 to yield 2.829%, or mid-swaps plus 185 bps.

A €750 million issue of notes due 2021 priced at 99.402 to yield 3.849%, or mid-swaps plus 220 bps.

And €800 million notes due 2025 priced at 99.204 to yield 4.845%, or mid-swaps plus 260 bps.

The £600 million notes due 2034 priced at 98.845 to yield 6.732%, or Gilts plus 315 bps.

BB Securities, BNP Paribas, Bradesco BBI, Credit Agricole, HSBC, JPMorgan and Mizuho Securities were the bookrunners for the Securities and Exchange Commission-registered deal. Bank of China and Standard Chartered Bank were the co-managers.

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

Kexim does deal

Korea's Kexim priced a two-tranche issue of notes due 2017 and 2024.

The deal included $750 million floating-rate notes due 2017 that priced at par to yield Libor plus 75 bps. The notes were talked at a spread of 70 bps to 80 bps.

The 10-year issue of $750 million 4% fixed-rate notes priced at 99.43 to yield Treasuries plus 112.5 bps following talk in the 115 bps area.

Barclays, BofA Merrill Lynch, Citigroup, Deutsche Bank, JPMorgan and Societe Generale were the bookrunners for the Securities and Exchange Commission-registered deal. US Bancorp and Woori Bank are joint leads.

The proceeds will be used for general corporate purposes, including rolling over or repaying maturing foreign-currency debt and other obligations, according to a report from Fitch Ratings.

Kexim is a lender based in Seoul, South Korea.

"Asian markets have seen a strong start to the year in terms of issuance," the analyst said.

CAF prints notes

In its new deal, Venezuela-based lender CAF priced CHF 150 million 2% notes due 2024 at 99.552 to yield mid-swaps plus 50 bps, a market source said.

The notes were talked at a spread in the 50 bps area.

UBS was the bookrunner for the deal.

KWG sets talk

China's KWG Property Holding set talk in the 9¼% area for its dollar-denominated issue of benchmark-sized notes due in five years, a market source said.

Citigroup, Standard Chartered Bank and UBS are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance existing debt and finance existing and new projects.

Indonesia gives guidance

Indonesia set talk for its upcoming issue of dollar-denominated and benchmark-sized notes due in 10 and 30 years, a market source said.

The 10-year tranche was talked at a yield of 5.95% and the 30-year was talked at 6.85% to 6.9%.

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

Add-on from Kaisa

On Monday, China's Kaisa Group Holdings Ltd. priced a $250 million add-on to its existing 8 7/8% notes due 2018 at 101, according to a company filing.

Citigroup, Credit Suisse and HSBC were the bookrunners for the Regulation S deal.

The original issue priced on March 19 at par.

The proceeds from the add-on will be used to refinance existing indebtedness, finance existing and new property projects and for general corporate purposes.

Kaisa Group is a Shenzhen, China-based property development company.

© 2015 Prospect News.
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