Santander Chile, Braskem, Poly Real Estate among issuers; Lat-Am debt tightens

By Christine Van Dusen

Atlanta, April 16 - Banco Santander Chile, Brazil's Braskem SA, Brazil's Votorantim Cimentos SA, China's Poly Real Estate Group Co. Ltd. and China's Azure Orbit II International Finance Ltd. printed new notes on Wednesday as tensions and violence ramped up in Ukraine.

"Tomorrow's meeting in Geneva between the United States, European Union, Ukraine and Russia - if it indeed goes ahead - will be a clear focal point for investors," a London-based analyst said. "But events in Ukraine over the next 24 hours will also be crucial."

In response, Russia's 2030 bonds were relatively flat to Tuesday's close, following that day's sell-off.

"The rest of [emerging markets] is also opening unchanged with limited activity," she said.

Spreads for Latin American bonds opened and traded a bit wider on Wednesday morning, with some names moving out about 4 basis points, a New York-based trader said.

Bucking the trend was the recent issue of 4¼% notes due 2024 from Chile's Empresa Nacional de Electricidad SA, which managed to tighten early in the session, he said.

The notes priced at 98.980 to yield 4.377%, or Treasuries plus 175 bps, via BBVA and JPMorgan in a Securities and Exchange Commission-registered deal.

Later in the day, Latin American debt tightened, with Venezuela and PDVSA paper up between ¾ point and 1½ points amid better buying, another New York trader said.

Bonds from Argentina ended the session near Tuesday's levels, he said.

Also from Latin America, Brazil's Paranapanema SA set talk for a five-year issue of dollar-denominated notes.

Romania at reoffer

In other trading, Romania's new issue of 3 5/8% notes due 2024 - priced Tuesday at 99.374 to yield 3.701%, or mid-swaps plus 200 bps - was trading at reoffer on Wednesday morning, a trader said.

Citigroup, ING, Societe Generale and UniCredit were the bookrunners for the Regulation S deal.

The yield was a record low for the sovereign, according to a report from Erste Group Research.

"Overall, though, trading in
[Central and emerging Europe] fixed income is sluggish, with markets gyrating in line with the mood swings of major equity indices," the report said.

Finansbank flat

Also trading at reoffer on Wednesday was Turkey-based Turkiye Finans Katilim Bankasi AS' new 5 3/8% notes due 2019, a trader said.

The notes priced at par to yield 5 3/8%, or mid-swaps plus 363.4 bps, with Citigroup, Emirates NBD, HSBC and QInvest in a Regulation S deal.

DEWA tightens

Looking to the Middle East, Dubai Electricity and Water Authority saw some tightening in response to the awaited upgraded from Moody's Investors Service, a trader said.

The company's 8½% 2015 notes were spotted at 106.93 bid, 107.18 offered, while its 2018s moved to 101½ bid, 102 offered.

DEWA's 2020's were quoted at 121¼ bid, 121¾ offered.

Yen deal from Chilean bank

Banco Santander Chile priced a three-tranche issue of ¥27.3 billion notes due 2017 and 2019, a market source said.

The ¥2 billion 0.72% notes due 2017 priced at par to yield 0.72%, or yen swaps plus 45 bps. The notes were talked at a spread of yen swaps plus 43 bps to 50 bps.

The ¥6.6 billion three-year floating-rate notes priced at par to yield Libor plus 55 bps, following talk of 53 bps to 60 bps.

And the ¥18.7 billion 0.97% five-year notes priced at par to yield 0.97%.

Daiwa Securities, JPMorgan and Mizuho Securities were the bookrunners for the deal.

Poly issues notes

China's Poly Real Estate Group priced a $500 million issue of 5¼% notes due 2019 at 99.9375 to yield Treasuries plus 375 bps, a market source said.

Citic Securities and HSBC were the bookrunners for the Regulation S deal.

The notes were issued by Poly Real Estate Finance Ltd., a special-purpose vehicle owned by Hengli (Hong Kong) Real Estate Ltd., which is the primary offshore subsidiary for Poly Real Estate Group.

The Guangzhou-based issuer develops and sells residential homes and manages and leases properties.

Issuance from Azure

China's Azure Orbit printed a $500 million issue of 3 3/8% notes due 2019 at 99.941 to yield 3.388%, or Treasuries plus 175 bps, a market source said.

Bank of Communications, UBS and Standard Chartered Bank were the global coordinators. Bank of Communications, Bocom International, ANZ, HSBC, Standard Chartered Bank and UBS were the joint bookrunners and lead managers for the Regulation S deal.

The issuer is the Hong Kong branch of Bank of Communications Co. Ltd.

Cement maker brings deal

Brazilian cement-maker Votorantim Cimentos sold €650 million 3¼% notes due 2021 at 98.672 to yield 3.467%, or mid-swaps plus 220 bps, a market source said.

The notes priced tighter than talk, set in the 240 bps area.

Citigroup, HSBC, Santander GBM, BB Securities, Banco Votorantim and Bradesco BBI were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Braskem adds on

Brazil-based petrochemical company Braskem priced a $250 million reopening of its 6.45% notes due 2024 at 103 to yield 6.037%, a syndicate source said.

Talk was set in the 102.50 area.

BB Securities, BTG Pactual, Credit Suisse, Morgan Stanley and Standard Chartered Bank were the bookrunners for the SEC-registered deal.

Mitsubishi UFJ Securities was a co-manager.

The original $500 million issue priced in January at par to yield 6.45%, or Treasuries plus 360.70 bps, according to a company filing.

Paranapanema gives guidance

Brazil-based copper producer Paranapanema set talk in the high-8% area for its upcoming issue of dollar-denominated notes due in five years, a market source said.

BB Securities, Bradesco BBI and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

New issue from Sritex

On Tuesday, Indonesia's PT Sri Rejeki Isman Tbk (Sritex) sold $200 million 9% notes due in 2019 at par to yield 9%, a market source said.

The notes priced at the wide end of talk, set in the high-8% to 9% area.

Barclays was the sole bookrunner and lead manager for the Rule 144A and Regulation S deal.

The notes were issued by Golden Legacy Pte. and guaranteed by Sritex and subsidiary PT Sinar Patnja Djadja.

KT deal oversubscribed

The final book South Korea-based KT Corp.'s two-part issue of $1 billion notes due 2017 and 2019 was a combined $4 billion from 163 accounts, a market source said.

The $650 million 1¾% notes due in 2017 that priced at 99.791 to yield Treasuries plus 100 bps drew 70% of its orders from the United States.

About 24% of the orders came from Asia and 6% from Europe, with 78% from asset managers, 10% from banks, 9% from insurers and 3% from private banks.

The $350 million 2 5/8% notes due 2019 that priced at 99.642 to yield Treasuries plus 110 bps drew 40% of its orders from Asia, 35% from the United States and 25% from Europe.

About 51% of the orders came from asset managers, 21% from banks, 15% from insurers and 13% from private banks.

BofA Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and HSBC were the bookrunners for the Rule 144A and Regulation S deal.

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