Bharat readies issuance; oil prices, Trump speech on market’s mind; Turkey underperforms

By Christine Van Dusen

Atlanta, Jan. 10 – India’s Bharat Petroleum Corp. Ltd. made its way to the primary market on Tuesday as emerging markets investors eyed oil prices and awaited President-elect Donald Trump’s Wednesday news conference.

“Crude oil prices have started on the weaker foot as doubts are arising on whether OPEC and non-OPEC producers will stick to their deal to cut output while there are also fears about rising output from the United States and other markets,” a London-based analyst said. “Prices have, however, stabilized into the morning, driven by Russia, where producers have started reducing output by more than planned, according to the Energy Ministry.”

Kuwait is promising to implement the deal over the next six months, rather than immediately. On Friday, seven oil ministers will meet in Abu Dhabi.

Against this backdrop, trading of emerging markets credit was mixed, the analyst said, with Turkey the underperformer.

“Despite the lack of any new stories, the Turkish lira is testing new record levels at 3.77 per dollar this morning,” he said. “As a result, we see sovereign credit default swaps, up 3 basis points to 288 bps, and cash widening further versus yesterday.”

Indeed, Turkey’s bonds were about 3 bps wider on Wednesday morning, at 288 bps.

Yields on bonds from Kazakhstan are expected to continue to decline amid higher oil prices, even after the National Bank of Kazakhstan decided to keep the key rate unchanged, according to a report from Schildershoven Finance BV.

In deal-related news, India’s NTPC Ltd. scheduled a roadshow to market a 10-year issue of euro-denominated notes.

Bharat advances deal

India’s Bharat Petroleum set initial talk in the Treasuries plus 220 bps area for benchmark-sized issue of dollar-denominated notes due in 10 years, a syndicate source said.

Citigroup and Standard Chartered Bank are the joint global coordinators and – with DBS Bank, MUFG and SBI Capital Markets – the joint bookrunners and joint lead managers for the Regulation S deal.

The notes will be issued by indirect subsidiary BPRL International Singapore Pte. Ltd.

Bharat Petroleum is an oil and gas company based in Mumbai.

NTPC sets roadshow

For its upcoming issue of 10-year euro notes, India’s NTPC mandated Axis Bank, Barclays, Citigroup, MUFG, SBI Capital Markets and Standard Chartered Bank as bookrunners, a market source said.

A roadshow for the Regulation S notes will begin on Jan. 16.

NTPC is a New Delhi-based power company.

Petrobras releases details

Brazil’s Petroleo Brasileiro SA (Petrobras) released details on the $4 billion two-tranche issue of notes due Jan. 17, 2022 and 2027 via Petrobras Global Finance BV.

The $2 billion five-year notes priced at par to yield 6 1/8%. They had been talked at a yield in the 6½% area.

The $2 billion 10-year bonds priced at par to yield 7 3/8% and had been talked in the 7¾% area.

Banco Bradesco BBI, Citigroup, HSBC, Itau BBA and Morgan Stanley are the joint bookrunners for the deal.

The proceeds will be used to fund tender offers for several series of notes. Petrobras Global Finance is offering to pay up to $4 billion, increased from $2 billion, excluding interest.

The remaining proceeds will be used for general corporate purposes.

Petrobras is an energy company based in Rio de Janeiro.

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