Primary sees deals from Powerlong, Pemex; Samarco bonds mixed; Petrobras may get debt help

By Christine Van Dusen

Atlanta, Nov. 19 – China’s Powerlong Real Estate Holdings Ltd. and Mexico’s Petroleos Mexicanos SAB de CV sold notes on Thursday as trading of Latin American bonds were mixed.

Meanwhile, Brazil’s Samarco Mineracao SA – a mining company owned by BHP Billiton Ltd. and Vale SA – remained in the news on Thursday, as two more of its dams looked to be at risk of collapse. About two weeks ago, the Fundao dam broke open, killing at least 11 people as it released billions of gallons of mud.

“Opinions on the future of the company and bonds are mixed,” a trader said. “On the one hand, Vale and BHP support is a positive. On the other, the cost of compensating and cleaning the victims and their property is already piling up and should go well beyond current balance sheet liquidity and available insurance, even before we consider the future viability of the business as a non-integrated pelletizer.”

Other Latin American credits put in mixed performance on Thursday, another trader said.

“Some credits are trying to hold recent levels after grinding lowers while others move lower,” he said.

Brazil-based Gerdau SA started out well-offered in the Street and then fell a point “on no real news,” a trader said.

“The bonds managed to recoup some of the drop into the close, with buyers surfacing from most account bases,” he said.

Braskem SA traded at the previous day’s levels, if not a bit higher, a trader said.

“The Street had been recently supporting some of these credits, but now bids are pulled back, and it’s resetting the market as if this is the beginning stages of some protracted selling,” he said.

Ecopetrol moves lower

In other trading from Latin America, Colombia’s Ecopetrol SA moved lower amid more selling on Thursday afternoon, a trader said.

High-grade and high-yield names from Mexico continued to tick lower, he said, and Cemex SAB de CV received little to no support in the Street.

And Brazil-based Petroleo Brasileiro SA rallied in the afternoon on the news that the government is looking at a debt plan that would boost the debt-saddled company’s capital, a New York-based trader said.

The debt plan could include some debt issuance, he said.

Turkey in focus

From Turkey, sovereign bonds continued to trade well for most of the day, with shorts being squeezed through the curve, a trader said.

The 2024s were well offered “but have cheapened on the curve, so now they look slightly attractive versus the 2026s,” he said. “The long end is starting to perform as the steepening takes a pause and the spreads on the curve tighten in lockstep.”

Banks from Turkey traded better, he said.

Alfa Bank draws orders

The new issue of notes from Russia’s OJSC Alfa Bank – $500 million 5% notes due 2018 that priced Wednesday at par – drew a final order book of about $2.75 billion, a market source said.

About 43% of the orders came from Russia, 24% from the United Kingdom, 13% from Switzerland, 16% from other Europe and 4% from Asia.

Banks picked up 39%, asset managers 32%, private banks 13%, insurers 6% and others 10%.

UBS was the central coordinator for the Regulation S deal. Alfa Bank and Barclays also led the transaction.

On Thursday, the notes traded up about a Ľ point, a trader said.

Issuance from Powerlong

In its new deal, China’s Powerlong Real Estate Holdings sold $200 million 7 5/8% notes due Nov. 26, 2018 at 99.017 to yield 8%, a market source said.

Guotai Junan Securities (Hong Kong) Ltd., Merrill Lynch International and Credit Suisse Securities (Europe) Ltd. were the joint lead managers and joint bookrunners for the Regulation S offering.

The proceeds will be used to refinance existing debt.

The real estate company is based in Hong Kong.

Pemex prices bonds

Also on Thursday, Mexico’s Pemex sold CHF 600 million 1˝% notes due Dec. 8, 2020 at 100.168 to yield 1.455%, or mid-swaps plus 205 basis points, a market source said.

The notes were talked at a spread of 205 bps to 215 bps.

BNP Paribas and Credit Suisse were the bookrunners for the deal.

Pemex is a Mexico City-based petroleum company.

Televisa launches notes

Mexico’s Grupo Televisa SAB launched a two-tranche issue of $1.2 billion notes due Jan. 30, 2026 and Jan. 31, 2046, a market source said.

The $300 million 10-year notes launched at Treasuries plus 245 bps, following initial price talk in the 262.5-bps area.

The $900 million 30-year notes launched at Treasuries plus 312.5 bps, following talk in the 337.5-bps area.

Goldman Sachs & Co., HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC are the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes, including capital expenditures associated with the continued growth of its cable and telecommunication segments.

The company said it will apply to list the notes for trading on the Luxembourg Stock Exchange.

Grupo Televisa is a Mexico City-based mass media company.

© 2015 Prospect News.
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