Bank of China, Hyundai Motor price note offerings; Essar Steel, Kaisa Group set roadshows

By Christine Van Dusen

Atlanta, April 12 - Monday started off slow for emerging markets but picked up a little speed in the afternoon with the pricing of two Asian deals and news from several other issuers, market sources said.

As of midday in Europe, it was "very quiet," a London-based trader said. "The tone is slightly better, but there are no deals."

As the day went on, however, activity perked up somewhat on the primary side with the pricing of Bank of China (Hong Kong) Ltd.'s $900 million add-on of 5.55% tier 2 notes due 2020 at 99.521 to yield 5.613%, or Treasuries plus 176 basis points. And Korea's Hyundai Motor Co. priced $500 million 4½% notes due 2015 at 99.699 to yield 4.568%, or Treasuries plus 197.5 bps, sources said.

That helped foster a "decent" tone for the day, a New York-based trader said.

Other deals that were expected to price Monday - namely MOL Hungarian Oil and Gas' euro-denominated, benchmark-sized issue of notes via BNP Paribas, Deutsche Bank, RBS and Unicredit - might take a day or more to come to market, a strategist said.

"It's just usually the way it works," he said, referring to the delay. "You don't know when it's coming until suddenly it's right on you. They're probably trying to squeeze the price a little bit. Sentiment is improving and U.S. earnings are not so bad, so they want, in a week like this, to squeeze the price."

Other deals that are expected to come soon include South America-focused Southern Copper Corp.'s planned senior unsecured notes due 2020 and 2040 via Credit Suisse, Goldman Sachs and Morgan Stanley and Hong Kong-based Country Garden Holdings Co. Ltd.'s benchmark dollar-denominated senior notes due 2017 via Goldman Sachs and JPMorgan.

Country Garden could price "any day," the strategist said.

Calendar builds

Monday also saw several upcoming deals come to the surface. There's India's Essar Steel Holdings Ltd. and Gallop Holding LLC's planned benchmark-sized dollar-denominated offering of seven-year notes, which will be presented in a roadshow until April 22.

China's Kaisa Group Holdings Ltd. is also holding a roadshow until April 21 for a $300 million offering of five-year notes.

And Chile's Sociedad Quimica y Minera de Chile SA (SQM) is planning to issue 10-year notes.

Secondary prices rise

On the secondary side, the market was "mostly just moving higher in price terms," a market source said. "Spreads are in general a little bit wider, but that's largely a reflection of Treasury effects. And if you look at the higher beta credits like Argentina and Venezuela, they're up."

That's a "good sign," he said. "The Ukraine is up quite a bit, more than one point total. They're an outperformer today. There may be some announcement coming."

Some news did come out of Ukraine on Monday: MHP SA, an agricultural company, announced plans to issue notes via Morgan Stanley, UBS and ING.

But that likely doesn't explain the Ukraine's strong performance on Monday, the strategist said. "I don't know what's going on with Ukraine, but they're doing awfully well today," he said.

Bank of China prices

Bank of China (Hong Kong) priced a $900 million add-on of 5.55% tier 2 notes due Feb. 11, 2020 at 99.521 to yield 5.613%, or Treasuries plus 176 bps, according to a market source.

BOC International, Deutsche Bank and UBS AG were the bookrunners for the Rule 144A deal.

Bank of China is a commercial banking group based in Hong Kong.

Hyundai sells notes

Korea's Hyundai Motor priced $500 million 4½% notes due April 15, 2015 (Baa3/BBB-/) at 99.699 to yield 4.568%, or Treasuries plus 197.5 bps, according to a market source.

Barclays Capital, Bank of America Merrill Lynch, Citigroup, Goldman Sachs and Nomura were the bookrunners for the Rule 144A deal, which came in below price talk that was in the Treasuries plus 205 bps area.

Hyundai is an auto manufacturer based in Seoul.

Essar Steel starts roadshow

Essar Steel Holdings and Gallop Holding began a roadshow on Monday for their benchmark-sized dollar-denominated offering of seven-year senior unsecured notes (B2/B), according to an informed source.

The roadshow wraps up on April 22.

UBS Investment Bank, Bank of America Merrill Lynch, Deutsche Bank Securities and Standard Chartered Bank are joint bookrunners for the deal, which is being marketed via Rule 144A and Regulation S, without registration rights.

The notes come with four years of call protection.

Proceeds will be used to refinance existing debt, to fund capital expenditures and acquisitions and for general corporate purposes.

Essar is a vertically integrated global steel producer based in Mumbai, India.

Kaisa begins roadshow

Kaisa Group Holdings began an international roadshow on Monday for its $300 million offering of five-year senior guaranteed notes (B2/B+), according to an informed source.

The roadshow for the Rule 144A and Regulation S deal will wrap up on April. 21.

Citigroup, Credit Suisse and UBS Investment Bank are the joint bookrunners.

The notes come with three years of call protection.

Proceeds will be used to refinance debt, to fund land acquisition and property development and for general corporate purposes.

Kaisa is a Shenzhen, China-based property development company.

SQM plans notes

Chile's Sociedad Quimica y Minera de Chile is planning to issue 10-year notes, according to a company press release.

JPMorgan and Deutsche Bank are the bookrunners for the deal, which could total about $200 million, a market source said.

The source also said SQM is holding a roadshow for the notes this week in London and the United States.

The issuer is a Santiago-based fertilizer producer.

MHP plans notes

The Ukraine's MHP plans to issue notes via Morgan Stanley, UBS and ING, according to a company filing.

Proceeds will be used for general corporate purposes, to finance the expansion of the company's poultry and grain businesses - principally through the construction of the Vinnytsya chicken farm and land acquisitions - and to repay an estimated $10 million of short-term loan facilities provided by Ukraine banks.

The deal was announced alongside an exchange offer of $250 million 10¼% senior notes due 2011 for new dollar-denominated notes due 2015.

MHP is an agricultural company that focuses on poultry, beef and grain.

Paul A. Harris contributed to this report

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