Guidance from Berau Coal, Hai Chao Trading; Sharjah taps bookrunners; Lat-Am flat at close

By Christine Van Dusen

Atlanta, Aug. 11 – Indonesia’s Berau Coal Energy Tbk. set talk for a new dollar-denominated issue of notes on a quiet Monday, as investors seemed to take a quick breather from worrying about the latest geopolitical turmoil.

Latin American sovereign bonds saw spreads narrow by as much as 3 basis points amid quiet flows at the start of the week, a New York-based trader said.

At the close, some spreads remained tighter and Argentina managed to hold on to some gains, he said.

Meanwhile, paper from Venezuela finished the day mostly unchanged. The sovereign’s 2027s moved from 82¾ in the morning to finish flat at 82.35, he said.

On the corporate side, Brazil’s Petroleo Brasileiro SA (Petrobras) was a stand-out while other names stayed close to Friday’s levels, another New York trader said.

Mexico-based Cemex SAB de CV’s bonds continued to inch back after hitting a rough patch, he said.

Corporacion Nacional del Cobre de Chile (Codelco) saw two-way activity on Monday, he said, and Colombian bonds were quiet while corporates from Chile outperformed.

In deal-related news, China’s Hai Chao Trading Co. Ltd. set talk, the Emirate of Sharjah mandated bookrunners and two issuers – Turkey’s Dogus Varlik Kiralama and India’s Delhi International Airport (Dial) – looked to issue bonds.

Also on Monday, Ukraine-based Mriya Agro Holdings’ bonds suffered after the agricultural company failed to meet some debt obligations.

“The company said its financial condition has been deteriorating in recent months because of depressed prices for grains, a spike in prices for inputs, and problems with raising working capital,” according to a report from Eavex Capital.

Mriya Agro bonds suffer

As Mriya Agro has looked for consultants to review its businesses and improve its liquidity position, its 2016 and 2018 bonds have lost more than 20 percentage points.

“The company is basically admitting that, in light of its liquidity problems, it is seeking to restructure its debt load,” Eavex said. “In addition to the obvious destructive effect on Mriya’s bonds, we view this news as negative for the overall Ukrainian agricultural universe.”

Berau gives guidance

Indonesia-based coal producer Berau set talk in the 10½% area for a dollar-denominated and benchmark-sized issue of notes due in five years, a market source said.

Barclays, Citigroup and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for the repayment and redemption of the company’s outstanding 2015 notes.

Hai Chao trading sets talk

China’s Hai Chao Trading set talk in the Libor plus 170 bps area for its upcoming issue of $300 million floating-rate notes due in three years, a market source said.

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

The issuer is based in Hong Kong.

Sharjah picks banks

The Emirate of Sharjah has mandated HSBC, National Bank of Abu Dhabi and Standard Chartered Bank as bookrunners for a possible issue of Islamic bonds, a market source said.

The sukuk could come to the market in the second half of this year.

Turkish issuer, Dial eye bonds

Turkey-based leasing company Dogus Varlik Kiralama is looking to issue Islamic bonds, a market source said.

And India’s Delhi International Airport (Dial) is looking to issue $300 million notes due in five years, a market source said.

No other details were immediately available on Monday.

Latvia’s 4finance sells notes

On Friday, Latvia’s AS 4finance printed a $200 million issue of 11¾% notes due Aug. 8, 2019 at par to yield 11¾%, a market source said.

The notes priced in line with talk, set in the 11¾% area.

Credit Suisse was the bookrunner for the Rule 144A and Regulation S deal.

The proceeds will be used to refinance existing debt, including the payment of a concurrent tender offer, and for general corporate purposes.

The provider of short-term loans is based in Riga, Latvia.

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