Latam Airlines launches $700 million seven-year offering; Venezuela, Mexico, Colombia quiet

By Colin Hanner

Chicago, April 6 – New and recent issues continued to dominate the emerging market space into the afternoon on Thursday, with Chile’s Latam Airlines Group SA launching, but not pricing as of press time, a $700 million offering.

Latam Airlines launched a $700 million offering of seven-year notes to yield 6 7/8%, a market source said. The deal has not officially priced.

Yield talk had been in the 7% area, a market source said.

The Rule 144A and Regulation S offering was expected to price on Thursday.

BofA Merrill Lynch and Credit Suisse are the global coordinators and, along with BNP Paribas, BTG Pactual, Natixis and Santander, are the bookrunners.

The airline is based in Santiago.

New issues were getting the bilk of attention in the Latin American space, a market source said, adding that it is still reasonably constructive despite equity volatility in world markets.

Secondary markets, on the other hand, were not as active.

“There’s not a lot of news to drive the secondary market,” the source said.

Colombia, Mexico ‘quiet’

A market source characterized Mexican and Colombian markets as “very quiet.”

Columbia’s 4 3/8% notes due 2021 were quoted at 106 bid, 106½ offered.

And its 4% notes due 2024 were quoted at 102.95 bid, 103.45 offered.

In Mexico, “dealers appeared to be on the short side” despite it being quiet, a market source said.

The sovereign’s 5 1/8% notes due 2020 were quoted with a 108.15 bid, 108.55 offer. And its 4% notes due 2023 were quoted with a 103.10 bid, 103½ offer.

Both sets of notes are nearly unchanged on the week.

Venezuela sovereigns

Petroleos de Venezuela SA (PDVSA)’s bonds are up a round number on the week, about 1 point across the board.

Its 5¼% notes due 2017 were quoted with a 96½ bid, 97½ offer.

The 9% notes due 2021 were quoted with a 50½ bid, 51½ offer.

And the 6% notes due 2024 were quoted with a 38¼ bid, 39¼ offer.

Venezuela’s bonds were mixed on the session.

Its 7% notes due 2018 were quoted with a 67½ bid, 68½ offer, down around 1 point.

Its 12¾% notes due 2022 were quoted with a 57½ bid, 58½ offer, around flat.

And its 9¼% notes due 2027 had a 47¾ bid, 48¾ offer, up 1¾ points to its last mark.

Dar Al-Arkan prices

Dar Al-Arkan Real Estate Development Co. is selling $500 million of Islamic bonds.

The five-year bonds were priced with a 6 7/8% coupon, the company said.

A market source said the issuance received significant interest from the market, with the order book closing close to $1.05 billion.

Alkhair Capital, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, Goldman Sachs International, Noor Bank and QInvest were the joint bookrunners of the deal.

The issuer is a Saudi Arabia-based property developer.

Africa Finance sets talk

A market source said Nigeria’s Africa Finance Corp., which had been winding up a roadshow on Wednesday, said initial price talk was in the 4 3/8% area for its dollar-denominated seven-year notes.

The source said books for the Lagos-based infrastructure-financing entity are in excess of $1 billion.

Sinopec widens

“[It was a] weak morning, but despite the market moving 2-3 basis points wider, things still feel generally resilient,” a market source said.

“Flows in the new Sinopec deal” – a benchmark offering of dollar-denominated notes in three tranches – “have been muted with all tranches opening wider on initial selling before finding some support and then fading again into lunch,” a market source said.

The deal includes three-year notes talked at Treasuries plus 120 bps, five-year notes talked at Treasuries plus 130 bps and 10-year notes talked at Treasuries plus 150 bps, a market source said.

All of the notes were trading 5 bps wider, “although seeing more buying interest in the [three-year notes] than the others,” a market source said.

Saudi sovereigns

Saudi Arabia’s 2 3/8% notes due 2021 were quoted with a 98.06 bid, 98.24 offer, about ½ point lower over the past two sessions.

Seeing similar losses over the same period were its 3¼% notes due 2026, which were quoted with a 97.20 bid, 97.35 offer.

Paul A. Harris contributed to this review.

© 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.