New Nigeria bonds up in trade; Credito Real prices at tight end; Cemig GT sets roadshow

By Rebecca Melvin

New York, Nov. 21 – Nigeria’s newly priced 6½% notes due 2027 and 7 5/8% notes due 2047 traded up strongly Tuesday after the sovereign priced $1.5 billion of each tranche well below initial talk, according to a market source.

The Nigeria 2027 notes were quoted at 101 5/8 bid, 101¾ offered and the Nigeria 2047 notes at 102¼ bid, 102¾ offered in the early going.

The deals met with significant demand from investors attracted to the high yield and decent value of the bonds as well as the issuer credit boosted by its strong oil reserves.

Citigroup and Standard Chartered plc were joint bookrunners of the Rule 144A and Regulation S eurobonds (expected ratings: B/B+).

There was a flurry of activity in the emerging Asia primary market with the Export-Import Bank of China (Chexim) launching a combined $2.1 billion of five-, 10- and 30-year notes and a €1 billion tranche of 5.5-year notes.

Shenzhen International Holdings Ltd. priced $300 million perpetual step-up notes at par to yield 185 basis points over U.S. Treasuries. In India, corporate issuer Reliance Industries Ltd. priced $800 million of Rule 144A and Regulation S notes at par to yield 3.667%, and India’s Power Finance Corp. Ltd. has scheduled a roadshow for a benchmark-size offering of dollar 10-year green notes.

In Latin America, Mexico’s Credito Real SAB de CV Sofom ER priced an upsized $230 million of 9 1/8% subordinated perpetual notes at par. Pricing of the came at the tight end of talk, guided to a yield of 9¼% plus or minus 125 bps. Initial price talk was for a low to mid 9% yield.

Also in Latin America, Cemig Geracao e Transmissao SA, the generation and transmission unit of Brazil’s Companhia Energetica de Minas Gerais, has set fixed-income investor meetings starting Thursday in regard to a planned offering of dollar-denominated notes.

Cemig GT scrapped a proposed international notes offering earlier in the year. The new deal, with meetings being arranged by the same set of bookrunners, Bradesco, Citigroup, Deutsche Bank and Itau BBA, comes fast on the heels of a Moody’s downgrade on Oct. 31.

Moody’s America Latina downgraded Cemig and the subsdiaries Cemig GT and Cemig Distribuicao to B3 from B2, citing liquidity constraints and uncertainty regarding upcoming debt maturities amounting to R$3.33 billion by Dec. 15.

The Cemig GT and Cemig D ratings reflect the guarantees provided by the holding company as well as cross-default clauses embedded in the various debt documents across the corporate family, according to Moody’s.

The primary market for the Central & Eastern Europe, Middle East and Africa regions was quiet, a market source said.

But in the secondary market, Turkish bonds remained volatile. The sovereign’s debt was weak to start Tuesday and then came back a bit, sources said.

Turkey’s spreads opened 3 bps to 5 bps wider and widened further through the day by as much as 8 bps. But they came back late in the afternoon despite lira weakness, closing 1 bp to 3 bps wider.

“In financials, we saw better sellers in the morning and we got hit in bonds as wide as 18 bps. The buyers came back in the afternoon and we closed around 8 bps wider across most names,” a London-based market source said regarding Turkey.

Halkbank continued to drop without too much trading as spreads in this name closed around 20 bps wider.

In Russia, the sovereign opened tighter and then moved back to unchanged.

“We saw better buyers of the 26’s, which looks the cheapest part of the curve. There was good two-way flow across the long end,” the market source said, referencing Russia five-year CDS closing 1 bp tighter at 133.

Gazprom’s euro issues saw some good two-way flow, and in general there was “better buying” of the 2023, 2024 bonds and selling of the shorter-dated paper.

In Central and Eastern Europe, there was activity in Hungary’s Rephun 2027 euro note, which has now normalized on the curve. The curve of Rephun U.S. dollar notes closed 2 bps tighter with better buying in the 2041 notes.

In the Balkans, Croatia’s euro-denominated notes “took another leg higher” as spreads closed 3 bps to 4 bps tighter. The new Croatia 2030 notes now stand 2 points higher since issue last week.

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