Ukraine news puts markets on pause; PDVSA takes a hit; Asian corporates set marketing trips

By Christine Van Dusen

Atlanta, Aug. 15 – Several Asian issuers set roadshows on Friday as the market’s recent risk-on attitude was squashed by news out of Ukraine and by soft economic data from the European Union.

Ukraine forces at the border shelled and destroyed part of a Russian convoy that Kiev said was a military incursion but Moscow said was carrying aid. This news, essentially, put trading of emerging markets assets on pause on Friday, a trader said.

Spreads for Latin American names started the day a bit tighter on lighter flows but quickly widened to the previous day’s levels as a result of the geopolitical landscape, a New York-based trader said.

Venezuela and Petroleos de Venezuela SA (PDVSA) took a hit, with PDVSA’s 2026s trading at 61.05 after hitting a high of 61.40 and following Thursday’s close of 60.10.

PDVSA’s 2017s traded at 92.55 from an earlier high of 92¾ and Thursday’s close of 92.60.

Argentina continued to struggle as it dealt with its debt default, with the Bonar 2024s trading at 84¾ from 86¼ and the par bonds moving to 49 from 49½ on Thursday, he said.

Brazil’s 2045s closed Friday at 97½, off an earlier high of 97¾ and Thursday’s level of 97¼.

Mexico’s 2044s, meanwhile, closed at 103¼. Earlier in the session they were spotted at 103½, and on Thursday they closed at 102½.

Corporate bonds from Latin America were higher and tighter during the morning too, then shut down on the Ukraine-related news, though they remained firm into the close, another New York-based trader said.

Bonds weren’t chased higher but they were better bid, he said.

Lat-Am in focus

Notably, Brazil-based Votorantim SA and Braskem SA saw their curves move higher, a trader said. And Brazil’s Vale SA continued to tighten.

Mexico’s Cemex SAB de CV was an outperformer as it continued to recover from previous losses, he said.

The company’s 2024s were trading above 104 on Friday morning after trading as low as 99¼ on Aug. 1. The 2022s were above 118 after printing at 114¾ two weeks ago.

Oceanwide sets roadshow

China Oceanwide Holdings Group Co. Ltd. (COHG) will set out on Aug. 21 for a roadshow to market a possible issue of notes, a market source said.

Citic Securities and UBS are arranging the trip, which will travel to Hong Kong and Singapore and end on Aug. 22.

COHG is a real estate business based in Beijing.

Marketing trip for CMG

China Metallurgical Group Corp. will set out on Aug. 18 for a roadshow to market a dollar-denominated issue of Regulation S notes (expected rating: A1), a market source said.

ABC International, BOC International, DBS Bank and Morgan Stanley are the bookrunners for the deal.

The company in June announced a roadshow for a similar offering with BOC International, Morgan Stanley and ICBC (Asia).

The bonds will be issued by indirect subsidiary MCC Holding (Hong Kong) Corp. Ltd.

The Beijing-based metallurgical engineering contractor designs and constructs iron and steel plants.

Roadshow for Pacific Radiance

Singapore’s Pacific Radiance Ltd. will commence a roadshow on Aug. 18 for a Singapore dollar-denominated issue of notes with two banks, a market source said.

DBS Bank and OCBC are the bookrunners for the deal.

Pacific Radiance owns and operates offshore vessels and provides subsea services, shipyard services, marine equipment and project logistics to the oil and gas industry. The company is based in Singapore.

Korea Western seeks issuance

Korea Western Power Co. Ltd. is looking to issue dollar-denominated notes, a market source said.

Barclays, BofA Merrill Lynch and Standard Chartered Bank are the bookrunners for the deal.

Korea Western engages in the production and supply of electricity and has headquarters in Seoul, South Korea.

Hai Chao does deal

On Thursday, Hai Chao Trading Co. Ltd. priced $300 million floating-rate notes due Aug. 12, 2017 at par to yield Libor plus 165 basis points, a market source said.

The notes were talked at a spread in the 170 bps area.

Standard Chartered Bank was the sole bookrunner for the Regulation S deal.

The issuer is based in Hong Kong.

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