YPF prices tighter than talk; new PKO Bank Polski notes edge up; Venezuela treading water

By Rebecca Melvin

New York, July 18 – Emerging markets saw a fairly decent bid on Tuesday as trading action and the primary market ticked along modestly, albeit at lighter, summer volumes, market sources said.

Argentina’s Yacimientos Petrolíferos Fiscales SA priced $750 million of 6.95% notes due 2027 at par after launching the deal on Monday at a talked coupon of 7¼%.

YPF’s pricing 30 basis points below initial price talk was impressive, a New York-based market source said.

“It’s a testament to the market, and they have definitely come a long way,” the source said.

The Buenos Aires-based petroleum and natural gas company priced its Rule 144A and Regulation S notes via joint bookrunners Credit Suisse and JPMorgan.

Poland’s PKO Bank Polski SA’s newly priced ¾% notes moved up mildly upon release for secondary market dealings to 100.35 bid, 100.45 offered after the Warsaw-based lender priced €750 million of the four-year notes at 99.792 to yield mid-swaps plus 65 bps.

Nostrum Oil & Gas plc’s 8% notes that priced at par on Monday were seen at 100.60 bid, 100.80 offered early Tuesday, which was deemed an OK debut for the oil & gas E&P company’s $725 million of five-year notes.

Also in the primary arena, Peru priced S/. 10 billion 6.15% 15-year notes. The Rule 144A and Regulation S notes were sold at 99.9954 via global coordinators and bookrunners BNP Paribas, HSBC Securities (USA) Inc., BofA Merrill Lynch, and Scotia Capital (USA) Inc.

“They’ve taken care of their financing needs for a while,” a New York-based market source said of the deal that priced on Monday in local currency, which was the equivalent of about $3 billion. Proceeds were expected to be used to manage the sovereign’s external liabilities.

Back in established issues, Africa’s credits were mixed, a trader said early Tuesday. Angola was well bid, and Nigeria was better; but, Gabon and Kenya were unchanged, and Ghana widened out by about 15 bps to 20 bps.

There were no particular market drivers for the moves, the trader said. And the action was not related to news that Mozambique missed a coupon payment due Tuesday on its 10½% notes due 2023, an issue with about $726.52 million outstanding.

Mozambique previously missed the $59.76 million payment due Jan. 18 on the 10½% notes, which trade between 70 and 80, and were unaffected by Tuesday’s missed coupon.

“It was pretty well telegraphed, and the [paper] is pretty isolated,” the trader said of the missed payment.

Venezuela’s sovereign bonds and those of state-owned oil company Petroleos de Venezuela SA were the object of much speculation on Tuesday, but quiet in trading, with little reaction yet to news that the United States is considering another round of sanctions against the country or individual government officials within the country.

“Right now, it’s wait and see regarding what kind of sanctions may be applied, a New York-based trader said.

“If personal sanctions against individual Chavistas are applied, there will be little effect on the debt market. But if there are economic sanctions, that could accelerate the prospect of default,” the trader said.

A second source said the Venezuela debt situation is like watching a train wreck. There is coupon due in August, which looks likely to be paid, but there are concerns about the payments due at the end of the year, the source said.

Among issues in focus on Tuesday was Venezuela’s 11.95% notes due 2031, which were quoted at 50 bid, 51 offered by a New York-based trader.

Venezuela’s 13 5/8% bonds that mature in August 2018 were at about 75.

On Monday, after 7.6 million Venezuelans cast ballots in an unofficial referendum against president Nicolas Maduro’s constituent assembly plans, Venezuela’s credit was flat to better by ¼ point.

Elsewhere in Latin America, Mexico’s Petroleos Mexicanos SAB de CV 6½% notes due 2027 were at 108, up from 107.5 on Monday, according to Trace data. Petroleo Brasileiro SA’s 7 3/8% notes due 2027 bounced around, trading as high as 109 and also below 108.5 on Tuesday, compared to its closing mark of 108.5 on Monday.

© 2015 Prospect News.
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