Coca-Cola Icecek prices benchmark; CEZ eyes tap; Klabin adds in gray; Venezuela weaker

By Rebecca Melvin

New York, Sept. 12 – Coca-Cola Icecek AS priced a $500 million benchmark at par on Tuesday to yield mid-swaps plus 225 basis points, which was well below initial talk for a yield of mid-swaps plus 265 bps.

The allocation process extended beyond London’s trading session, so this deal was expected to be a focus in Wednesday’s session.

CEZ Group of the Czech Republic announced a planned tap of at least €150 million to its existing 3% notes due June 5, 2028. The original €500 million of CEZ 2028 notes were seen at 112.75 in the secondary market on Tuesday with a wider z-spread of 81 bps, a market source said.

Brazil’s Klabin SA priced a dollar benchmark of $500 million at 99.414 to yield 4.95%. The Sao Paulo-based pulp, paper and paper products company traded up slightly in the gray market ahead of final terms being fixed, a New York-based market source said.

Also pricing on Tuesday was a $300 million issue by Peru’s San Miguel Industrias PET SA for 4½% seven-year notes that priced at par. San Miguel is a plastics company based in Lima, Peru.

In secondary action, emerging markets were generally seeing lower pricing in tandem with lower U.S. Treasury prices, but spreads were holding, a source said.

Venezuela and Petroleos de Venezuela SA were a little weaker again after moving a little lower into the close on Monday. Investors traded the Venezuela 9¼% notes due 2027 amid speculation about whether a coupon payment would be made on that paper this week.

“People are waiting to see if the [Venezuela 2027] coupon gets paid this week. In general they are looking at it with dirty pricing, and when it gets paid, it will be clean,” a New York-based trader said.

Trading the bond on a “dirty” basis means that the bond price includes accrued interest.

The Venezuela 9¼% notes were trading at 39 bid, 39½ offered, sources said.

Another Venezuela issue, the PDVSA 8½% notes due 2017, which mature in December, traded at 92½ bid, 93¼ offered, sources said.

Overall, there has not been a lot of flow in the Venezuela curve, sources said. Trading has slowed since the United States imposed sanctions on trading of Venezuelan debt on Aug. 25.

A New York-based trader said Tuesday’s trading action was primarily focused on the long end of the curve, which means the lower-dollar portion of the curve. PDVSA’s notes due 2024, 2026, 2027 and 2037 had all been trading under 30 recently and now they are right around 30, the trader said.

Much of the day’s trading volume was on the PDVSA 2024 and 2025 notes, but the whole curve trades, sources said.

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