Primary market hosts Persero; whiplash trading for LatAm corporates; Russia in focus

By Christine Van Dusen

Atlanta, Sept. 26 – PT Pelabuhan Indonesia III (Persero) sold notes on Friday as investors kept an eye on tension between Ukraine and Russia.

Though Russia appeared to be pulling troops away from the border and a ceasefire seemed to be holding, a Kiev official on Thursday accused Russia of penalizing Ukraine by cutting off gas supplies.

Meanwhile, Ukraine officials were investigating ex-minister Yuriy Kolobov for his role in organizing a bond sale that would help bail out Russia. Russian news sources on Friday were reporting that Russia may be able to demand that Ukraine make an early repayment of the eurobond in November.

“The sovereign curve sold off as headlines came out of a criminal case having been opened against ex-finance minister Kolobov regarding last December’s sale of a $3 billion bond to Russia,” said Svitlana Rusakova of Dragon Capital. “This made people worried about the possible ramifications of Ukraine trying to avoid repaying the bond.”

Looking to Latin America, sovereign spreads continued to widen at the end of the week amid balanced flows, a New York-based trader said.

Dollar prices recovered slightly and Venezuela got a boost early on Friday but lost some gains, with the 2027s moving from 74.40 to 74.15, he said.

Corporate bonds from Latin America opened “meekly and weakly” on Friday and then saw a “feeding frenzy” into the close, he said.

Mexico-based Cemex SAB de CV moved 1½ points lower with no support before moving a point higher in a matter of minutes, he said.

“Clients were again much better sellers across the board, but also came to buy late in the day to find that they missed the lows of the day,” he said.

In other trading, the new issue of 4% notes due in 2020 from Hungary’s Magyar Export-Import Bank (Hungary Eximbank) traded at 99.1875 bid, 99.3125 offered on Friday, a London-based trader said.

Persero prints notes

In its new deal, Persero sold $500 million 4 7/8% notes due Oct. 1, 2024 at 99.414 to yield 4.95%, a market source said.

ANZ, Credit Suisse and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

The notes attracted a final order book of more than $6.4 billion from more than 300 accounts.

Persero is a Surabaya, Indonesia-based provider of port service facilities.

Tupi prices tap

On Thursday, Brazil’s Cimento Tupi SA priced a $35 million tap of its 9¾% notes due May 11, 2018 at par to yield 9 ¾%, a market source said.

BofA Merrill Lynch and Credit Suisse are the bookrunners for the Rule 144A and Regulation S deal.

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

The original $100 million issue priced in May of 2011 at 98.763 to yield 10%.

Cimento Tupi is a Rio de Janeiro-based producer, distributor and seller of cement and concrete.

Mexican retailer sells bonds

Mexico’s El Puerto de Liverpool SAB de CV priced $300 million 3.95% notes due Feb. 10, 2024 at 98.312 to yield Treasuries plus 165 basis points, a market source said.

The notes were talked at a spread in the 175 bps area.

BofA Merrill Lynch and Citigroup were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes and to repay existing indebtedness.

The retail company is based in Mexico City.

Sunshine 100 does deal

Also on Thursday, Sunshine 100 China Holdings Ltd. sold $115 million 12¾% notes due Oct. 8, 2017 at 99.879 to yield 12.80%, a market source said.

BNP Paribas, HSBC, Essence International, Citigroup and ABC International were the bookrunners for the Regulation S deal.

The proceeds will be used for general corporate purposes, to repay debts and to invest in existing and new real estate projects.

The issuer is a Beijing-based property developer.

Hana Bank issue oversubscribed

The final book for Korea-based Hana Bank’s new $300 million 4 3/8% notes due Sept. 30, 2024 was more than $2 billion, a market source said.

The notes priced Thursday at 99.241 to yield 4.470%, or Treasuries plus 195 bps with Barclays, Commerzbank, JPMorgan, Societe Generale, Standard Chartered Bank and UBS.

About 51% of the orders came from the United States, 39% from Asia and 10% from Europe.

Fund managers picked up 69%, insurers and pension funds 16%, private banks 8% and sovereign wealth funds 7%.

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