Argentina preps $15 billion notes; Brazil votes for impeachment; issuers line up roadshows

By Christine Van Dusen

Atlanta, April 18 – Argentina was in focus as the sovereign released final guidance for a four-tranche issue of up to $15 billion of notes on a Monday that saw oil prices drop after Sunday’s big meeting in Doha failed to yield an agreement on freezing production.

“Crude oil prices opened 7% lower this morning. However, they pared some of the losses to trade currently circa 5% down,” a strategist said. “The lack of an accord is certainly a negative risk factor for many oil-exposed [emerging markets] assets and might pose a turning point for the general bullish sentiment.”

Still, prices are unlikely to drop to January’s lows, he said.

“First, a deal [among oil producers] would have likely come at already-record levels anyway,” he said. “Second, the decline in United States production has become a similarly important key driver. Third, an open-ended strike of domestic oil workers in Kuwait, heavily affecting production levels, might temporarily offset some of the drop in oil prices.”

Meanwhile, the congress in Brazil voted to impeach President Dilma Rousseff.

“The next step sees a vote in Senate which, if successful, will require Rousseff to step down temporarily as a formal impeachment trial will start,” the strategist said.

Volumes for Latin American debt, meanwhile, were fairly light on Monday, a New York-based trader said. But prices did not weaken, despite the vote in Brazil and the change in oil prices.

“We continue to trade close to Friday’s levels, a bit higher on some credits, and clients are not buying with the fervor of sessions past,” he said. “But they’re also only selling here and there.”

Brazilian corporates continued to trade well, he said, with firm support from the Street.

Lat-Am gets attention

Colombia’s Ecopetrol SA was among the few names trading weaker on Monday, mostly on its longer end, “where we’ve seen some pretty consistent institutional selling the last three to four days, setting the Street up long,” the trader said.

Spreads from the region finished tighter while prices were mostly unchanged, another trader said.

“This morning looked very weak at the open, but as oil pared losses and equities jumped, EM paper tightened and went bid,” he said.

CDS tighten

Five-year credit default swaps spreads for Brazil closed at 340 basis points from 345 bps, while Mexico'’s moved to 157 bps from 160 bps.

“Cash prices were initially soft but came back in a big way midday and into the close,” he said. “Lat-Am high-yield finishes mixed on the day.”

PDVSA's 2017s closed at 53.75 from 54.25, and Venezuela’s 2027s finished at 39.75 from 40, he said.

Argentina’s Bonar 2024s closed at 111.25 from 111.50.

“The focus for Argentina will now be the four-tranche new issue and how well this supply is digested,” he said.

Argentina on deck

Taking a closer look at the Argentina deal, the three-year notes were talked at 6¼% to 6½% after initial talk in the 6¾% area.

The five-year notes were talked at 6 7/8% to 7 1/8%.

The 10-year notes were talked at 7½% to 7 5/8% after initial talk in the 8% area.

The 30-year notes were talked at 8%.

Deutsche Bank, HSBC, JPMorgan and Santander are the global coordinators for the Rule 144A and Regulation S deal. BBVA, Citigroup and UBS are the joint bookrunners.

The proceeds will be used to settle claims of holders of untendered debt and for general governmental purposes.

Pricing is expected to take place on Tuesday.

Flows in ‘holding pattern’

Flows were in a bit of a holding pattern on Monday, another trader said.

“I estimate somewhere in the region of $20 billion of new EM supply has hit the screens in the last few days,” he said. “That, together with the expected outcome of the meeting in Doha – no solutions – leaves today’s flows in a usual Monday holding pattern.”

Even the new issue of 8¾% notes due 2026 that Turkey’s Alternatifbank AS recently priced at 9%, which was a “star performer” last week, saw little movement, he said.

On Monday, the notes were “holding just below the Thursday high print, with limited flow,” he said.

China Aoyuan gives guidance

In deal-related news, China Aoyuan Property Group Ltd. set talk for its $250 million issue of three-year notes at 6 5/8%, a market source said.

ABC International, BofA Merrill Lynch, Credit Suisse, Deutsche Bank, Guotai Junan International and UBS are the joint lead managers and bookrunners for the Regulation S deal.

The proceeds will be used for refinancing and for general corporate purposes.

China Aoyuan is real estate developer based in Guangzhou, China.

Maybank on roadshow

Malaysia’s Malayan Banking Bhd. (Maybank) commenced on Monday a roadshow to market a dollar-denominated issue of bonds, a market source said.

Deutsche Bank, HSBC and Maybank Kim Eng Securities are the bookrunners for the issue.

The commercial and retail bank is based in Kuala Lumpur.

Chexim on the road

Export-Import Bank of China (Chexim) is on a roadshow for a three-year issue of benchmark-sized euro-denominated notes, a market source said.

Bank of China, Bocom HK Branch, Barclays, Citigroup, HSBC, Mizuho Securities and MUFG Securities are the joint lead managers for the Regulation S deal. Bocom International, ING, KGI Securities and Westpac Banking are the joint lead managers.

Chexim is a lender based in Beijing.

Abu Dhabi to market notes

Abu Dhabi will start a roadshow on Tuesday for a dollar-denominated issue of notes, a market source said.

BofA Merrill Lynch, Citigroup and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will start in Abu Dhabi and travel to London, New York City and Boston before concluding on April 22 on the West Coast.

Roadshow for BankMuscat

Oman’s BankMuscat will set out on Wednesday for a roadshow to market a dollar-denominated and benchmark-sized issue of notes, a market source said.

Bank ABC, Bank Muscat SAOG, Citigroup, Credit Agricole CIB, HSBC, MUFG Securities, National Bank of Abu Dhabi and Standard Chartered Bank as joint lead managers and bookrunners for the Regulation S offering.

The roadshow will be held in the Middle East, Asia and Europe.

The lender is based in Muscat.

JD.com plans dollar issuance

China’s JD.com is planning to issue two tranches of dollar-denominated notes, according to a filing from the company.

BofA Merrill Lynch and UBS are the bookrunners for the Securities and Exchange Commission-registered deal. Barclays is co-manager.

The proceeds will be used for general corporate purposes.

The notes will include a make-whole call.

The issuer is a Chinese electronic commerce company based in Beijing.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.