Issuance from Petrobras, Afreximbank; Hipotecario gives guidance; Qatar to market new notes

By Christine Van Dusen

Atlanta, May 17 – Brazil-based Petroleo Brasileiro SA (Petrobras) and African Export-Import Bank (Afreximbank) sold notes on Tuesday as the tone for emerging markets assets started off upbeat, supported by stronger oil prices, and then finished with wider spreads.

“EM credit pushes wider on the day but finishes off the widest levels seen late afternoon,” a New York-based trader said.

Brazil’s five-year credit default swaps spreads closed at 333 basis points from 329 bps, while Mexico’s moved to 170 bps from 166 bps.

“Cash prices do little as the bulk of credit swings are concentrated in the credit defaults swaps space,” he said. “Cash bonds barely flinched as U.S. Treasuries reversed course and equities hit intraday lows.”

High-yield bonds from Latin America were mixed on the day, he said.

Venezuela’s 2027s closed at 43 from 43.50, PDVSA’s 2017s finished at 63 from 62.50, and Argentina’s Bonar 2024 ticked down to 110 from 110.20.

The sovereign’s 2026s finished at 104.30 from 104.75, he said.

“Flows very light on the session, as has recently been the case during market sell-offs, with real money continuing to hold bonds,” he said. “Tomorrow all eyes are on the Fed minutes, which may come across stale but have recently been very favorable to risk assets, so it will be interesting to see if that trend continues.”

In deal-related news, Qatar mandated bookrunners for a dollar-denominated issue of benchmark-sized notes that will be marketed during a roadshow, a market source said.

The roadshow starts Thursday and will be held in Asia, Europe and the United States.

Qatar deal eyed

HSBC, JPMorgan, MUFG and QNB Capital are the joint global coordinators and – along with al khaliji, Barclays, BofA Merrill Lynch, Deutsche Bank, Mizuho Securities and SMBC Nikko – the joint lead managers and joint bookrunners for the Rule 144A and Regulation S deal with Qatar.

The proceeds will be used for general funding and budgetary purposes.

“Sovereign deals like these do not come along every year, and given the investor base for Qatar, you have to expect multi-tranche and billions,” a trader said.

Hipotecario sets talk

Argentina’s Banco Hipotecario SA set talk in the low-8% area for an up to $200 million tap of its 9¾% notes due Nov. 30, 2020, a market source said.

BofA Merrill Lynch and Itau are the bookrunners for the Rule 144A and Regulation S deal, which is expected to price on Wednesday.

The proceeds will be used for working capital.

Hipotecario is a Buenos Aires-based commercial bank.

Mapletree draws orders

The new issue of notes that Singapore’s Mapletree Logistics Trust Management Ltd. priced Monday – S$250 million 4.18% perpetual notes that came to the market at par – drew a final order book of about $800 million from about 50 orders, a market source said.

DBS Bank and OCBC were the bookrunners for the deal.

About 24% came from fund managers and insurance, 64% from private banks and 12% from others, with 88% from Singapore.

The proceeds will be used for general corporate funding purposes.

Petrobras sells bonds

In its new deal, Brazil-based petroleum company Petrobras – via wholly owned subsidiary Petrobras Global Finance BV – priced a two-tranche issue of $6.75 billion notes due May 23, 2021 and 2026 alongside a tender offer, a syndicate source said.

The $5 billion notes due in 2021 priced at 8 5/8%, following talk in the 9% area.

The $1.75 billion notes due in 2026 priced at 9%, following talk in the 9¼% area.

BB Securities, BofA Merrill Lynch, JPMorgan and Santander were the bookrunners for the Securities and Exchange Commission-registered deal.

Other details were not immediately available on Tuesday.

Afreximbank prices notes

Afreximbank priced a $750 million issue of 4% notes due May 24, 2021 at 98.982 to yield 4.228%, or mid-swaps plus 300 bps, a syndicate source said.

MUFG was the global coordinator, and Barclays, HSBC, MUFG, Rand Merchant Bank and Standard Chartered Bank were the joint leads for the Regulation S deal.

Afreximbank is a Cairo-based international bank specializing in trade-related financing for Africa.

Prior to pricing, the book-building was “going well, as they opened early to ensure the Asian accounts get a chance to be involved,” a trader said. “Afrexim benefits from a very wide investor base, due to its investment-grade rating and supra status.”

The deal drew in a “broad spectrum of investor types that are looking at EM” amid “demand that becomes multiples of the deal,” he said.

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