Dominican Republic, Bladex do deals; Vale earnings low, bonds well-bid; Malaysia performs

By Christine Van Dusen

Atlanta, April 30 – The Dominican Republic and Panama’s Banco Latinoamericano de Comercio Exterior (Bladex) sold notes on a firm Thursday for Asian credits, ahead of the long weekend in the United Kingdom, while Brazil-based Vale SA released low earnings.

“[Asian] high-grade cash is unchanged while new issues are generally tighter on the back of real-money demand after the rates move,” a London-based trader said.

The new deal from Hong Kong’s Cnooc Ltd. – a $3.8 billion, three-tranche offering of notes due in five, 10 and 30 years that the oil and gas exploration and production company priced on Tuesday – was mixed in trading.

The company priced $1.5 billion of 2 5/8% notes due May 5, 2020 at 99.716 to yield 2.686%, or Treasuries plus 128 basis points, following talk at 150 bps, which traded Thursday at 126 bps.

The $2 billion 3½% notes due May 5, 2025 priced at 99.075 to yield 3.611%, or Treasuries plus 160 bps, following talk of 180 bps, and traded at 160 bps on Thursday.

The $300 million 4.2% notes due May 5, 2045 priced at par to yield 4.2%, or Treasuries plus 149.6 bps, following talk of 170 bps, and traded Thursday at 150 bps bid, 146 bps offered.

Other emerging markets debt was “resilient” on Thursday morning, and just tracked weaker Treasuries instead of falling apart, another London-based trader said.

“EM is still an asset class where we expect continued inflows, so hold tight for the rally into the summer,” he said.

By the afternoon, many names were unchanged on spread, he said.

Looking to Greece, the debt-saddled sovereign and its creditors have decided to intensify their negotiations, a move that “could be positively perceived by investors,” according to a report from Schildershoven Finance BV.

Sinopec outperforms

The new 2½% 2020 bonds that China Petrochemical & Chemical Corp. (Sinopec Group) priced at 99.576 to yield Treasuries plus 125 bps outperformed on Thursday, the London trader said.

“The 2020 outperformed to tights of 121 bps while Sinopec’s 2025 closed unchanged at 148 bps bid, 145 bps offered,” he said.

The 3¼% notes due 2025 priced at 99.022 to yield Treasuries plus 145 bps after talk in the 160 bps area.

The deal also included 4.1% notes due in 30 years priced at par to yield 4.1%, or Treasuries plus 152 bps, and 0.5% notes due 2018 that priced at 99.716 to yield 0.596%, or mid-swaps plus 50 bps.

The €650 million 1% notes due 2022 priced at 99.243 to yield 1.113%, or mid-swaps plus 80 bps, matching talk.

Financial company bonds were also firmer on Thursday, he said.

“Away from that, short end Hong Kong corporates rallied,” he said. “Korea is unchanged, with small onshore demand.”

Malaysia stands out

Malaysia was an outperformer during the session, with the sovereign’s 2025s trading 7 bps tighter at 100 bps and the 2045s trading 5 bps tighter at 150 bps, the trader said.

This came as Standard & Poor’s revised the country’s credit outlook to negative, and as the Trade and Development Bank of Mongolia LLC was set to start a roadshow on May 4 for a dollar-denominated issue of notes.

BofA Merrill Lynch, ING and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will be held in Asia, Europe and the United States.

Also on Thursday, bonds from India were a touch softer but saw good two-way flow among short-dated financials, the trader said.

Vale, Pacific Rubiales in focus

From Latin America, Brazil-based Vale was getting some attention on Thursday as the company’s earnings fell to a six-year low on steel-industry worries, another trader said.

“Vale’s bonds have traded up – 15 bps to 20 bps tighter – and continue to be well bid, perhaps because certain investors view the results as a bottoming in the company’s cycle,” he said. “We see no major surprises in the release.”

And Toronto-based and Colombia-focused Pacific Rubiales Energy Corp. saw small volumes in trading on Thursday, though the curve was well-bid “and prices in the Street keep going up,” a trader said.

The company is currently holding investor meetings.

“Oil is up another 2%, and there are headlines about Venezuelan investors looking at acquiring some of the equity,” he said.

Dominican Republic prices taps

The Dominican Republic tapped two of its existing bonds – the 5½% notes due Jan. 27, 2025 and the 6.85% notes due Jan. 27, 2045 – for a total of $1 billion, a market source said.

The reopening of the sovereign’s 5½% notes due 2025 priced at 102.835 to yield 5 1/8% after talk in the 5¼% area.

The 6.85% notes due 2045 priced at 104.567 to yield 6½% after talk in the 6.65% area.

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

The proceeds will be used for general purposes of the government, including the partial refinancing of the 2015 budget.

Bladex sells notes

In its new deal, Panama-based Bladex priced $300 million 3¼% notes due in April of 2020 at 99.653 to yield Treasuries plus 190 bps, a syndicate source said.

The notes were talked at a spread in the 200 bps area.

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

The Panama City-based supranational bank was established by the central banks of Latin American and Caribbean countries.

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