Slovenia sells notes; BBK notes widen; Pacific Rubiales in the news; FOMC on market’s mind

By Christine Van Dusen

Atlanta, March 18 – Slovenia priced notes and many emerging markets bonds widened on Wednesday as investors awaited the results of the meeting of the Federal Open Market Committee.

“The market was a mixed bag again ahead of the FOMC tonight,” a London-based trader said. “Some names have widened a lot in the past week and fortnight. A combination of booking profits and expectations of further supply? Well, perhaps.”

He noted that the long end of many Middle Eastern curves has been widening lately, with Saudi Electricity Co.’s bonds back out to their wides.

“Perpetuals are holding,” he said. “Saw some interest in Abu Dhabi Islamic Bank.”

The new issue from Bahrain’s BBK BSC – $400 million 3½% notes due 2020 that priced on Tuesday at 99.09 to yield mid-swaps plus 200 basis points – closed almost 12 bps wider on the bid side, he said.

The notes came to the market at a yield of 3.701% via BNP Paribas, HSBC and National Bank of Abu Dhabi in a Regulation S deal.

Asian bonds were quiet during the morning session, ahead of the Federal Reserve’s comments, and started off with better sellers before balancing out at the end of the day, another London-based trader said.

“High-grade cash closed unchanged to 3 bps wider,” he said. “Recent issues were well held.”

In other news, Brazil-based Pacific Rubiales Energy Corp. released disappointing earnings and China’s Hainan Airlines Co. Ltd. set a roadshow while Jordan’s Hikma Pharmaceuticals plc planned a dollar deal.

The FOMC released the minutes from its meeting late in the afternoon and eliminated “patient” forward guidance while balancing that with “more dovish near-term growth guidance,” a rates strategist said.

“There remains a small chance of a June rate hike, but not with the preponderance of committee views,” he said.

Petronas recovers a bit

The London trader pointed to the new four-tranche issue of notes from Malaysia’s Petroliam Nasional Bhd. (Petronas), which recovered somewhat after widening on Tuesday.

The deal included $1.25 billion 2.707% Islamic bonds due in 2020 that priced at par to yield Treasuries plus 110 bps. On Wednesday the notes were spotted at 116 bps, after Tuesday’s level of 121 bps.

The 3½% notes due 2025 that priced at 99.125 to yield Treasuries plus 150 bps moved on Wednesday to 161 bps, after Tuesday’s 164 bps.

And the $1.5 billion 4½% notes due in 2045 priced at 98.767 to yield Treasuries plus 190 bps traded at 205 bps bid, 202 bps offered after trading Tuesday between 202 bps and 205 bps, he said.

BofA Merrill Lynch, CIMB and Deutsche Bank were the bookrunners for Regulation S deal.

Asia in focus

Bonds from Korea were mostly unchanged, with buyers on the short end, and India was under pressure and saw most names close between 3 bps and 8 bps wider, he said.

Among high-yield names in China, property companies closed Wednesday’s Asian session down between ½ point and ¾ points, he said.

“High-yield sovereigns traded in a tight range and closed unchanged on cash price but 1 bp to 3 bps wider on spread,” he said. “Indonesia’s 2045s were last down at 101 1/8 and closed at 101 1/8 bid, 101 5/8 offered.”

Pacific Rubiales gets attention again

Brazil-based Pacific Rubiales was once again in the news, this time after reporting quarterly earnings that included a loss that exceeded analysts’ expectations, a New York-based trader said.

The company also announced a suspension of dividends.

“Not affecting prices too badly,” he said. “We’re about ¾-point lower, but there is some Street support there. Customer activity is somewhat light and has no definitive skew.”

Earlier this week, Pacific Rubiales’ bonds plummeted after a contract change. Ecopetrol SA is looking for other operators of the Rubiales Field, and not continuing its contract with energy company Pacific Rubiales when the contract expires next year. That sent Pacific Rubiales’ bonds plummeting about 9 points on Monday – after Friday’s oil prices-related tumble of about 6 points.

Lat-Am firms up

In other trading from Latin America, the comments from the FOMC led to slightly firmer markets for many high-grade names, a New York-based trader said.

Brazil-based Petroleo Brasileiro saw strong price gains and two-way activity on large volumes, he said.

Brazil-based Vale SA’s bonds were quiet, with the 2020s underperforming a bit, he said.

Slovenia prices bonds

In a drive-by deal, Slovenia sold €1 billion 1½% notes due March 25, 2035 at 99.095 to yield mid-swaps plus 72 bps, a market source said.

The notes were talked at a spread of 70 bps to 75 bps.

Barclays, BNP Paribas, Goldman Sachs, Societe Generale CIB and UniCredit were the bookrunners.

The pricing looks to be “in line” with comparable credits, a trader said.

Hainan Airlines sets roadshow

China’s Hainan Airlines will set out on Thursday for a roadshow to market a Singapore dollar-denominated issue of notes, a market source said.

DBS Bank, Hong Kong International Capital Management and Oversea-Chinese Banking are the bookrunners for the Regulation S deal.

Hainan Airlines is based in Haikou, China.

Hikma to issue notes

Jordan’s Hikma Pharmaceuticals is looking to priced a dollar-denominated issue of benchmark-sized notes, a market source said.

Other details were not immediately available on Wednesday.

Hikma is an Amman, Jordan-based pharmaceutical company that produces branded and non-branded generic and in-licensed products.

Emirates NBD posts final book

The final book for Dubai-based Emirates NBD PJSC’s new $750 million 4 7/8% notes due 2023 that priced at par to yield mid-swaps plus 289.8 bps was €1.1 billion from 140 orders, a market source said.

About 49% of the orders came from Europe, 28% from the Middle East, 17% from the United Kingdom, and 6% from the offshore United States and Asia.

Fund managers picked up 45%, banks and private banks 45%, insurers and pension funds 7% and others 3%.

Citigroup, Emirates NBD Capital, HSBC, JPMorgan, Societe Generale CIB and Standard Chartered Bank were the bookrunners for the Regulation S deal.

© 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.