Deals ahead from Turk Katilim, Kuveyt Turk; Brazil’s bonds decline; Codelco widens

By Christine Van Dusen

Atlanta, Nov. 13 – Two Turkish corporates – Albaraka Turk Katilim Bankasi AS and Kuveyt Turk Katilim Bankasi AS – advanced deals on a slightly softer Friday for emerging markets assets.

“We opened a touch softer as the macro backdrop softens,” a London-based trader said. “Old trend resumes – rates better bid, lower commodities and weaker risk markets. But I’m not expecting us to sell off like we did in September, as the risks are now well posted and rates have somewhat priced in a December hike.”

Sovereign bonds from Turkey were slightly softer on Friday morning after outperforming on Thursday, he said.

“But cash prices are almost unchanged, on better rates,” he said. “Cash was cheap to credit default swaps, but the basis is coming back into range as cash outperformed. We have once again hit new steeps as the short belly is squeezed.”

Turkish banks and corporates were “heavy, overall,” he said, “with real-money lightening up on senior paper. Retail [investors are] also better sellers.”

Finansbank AS was heavy on Friday after recently outperforming, with heavy flow, on the news that National Bank of Greece is selling 100% of its stake in the Turkish lender and that Qatar National Bank is a likely buyer.

In other news from Turkey, Turkey’s Albaraka started a roadshow on Friday. The dollar-denominated issue of Islamic bonds is being led by Standard Chartered Bank, Barwa Bank, Dubai Islamic Bank, Emirates NBD Capital, Nomura International, Noor Bank and QInvest in a Regulation S deal.

And Turkey’s Kuveyt Turk mandated KFH Capital, Dubai Islamic Bank, HSBC, Noor Bank, QInvest and Emirates NBD to market a $400 million-issue of Islamic Regulation S bonds due in 10 years, a market source said.

Brazil in focus

In trading, Brazil’s bonds moved down on Friday on reports that President Dilma Rousseff could end up firing Finance Minister Joaquim Levy as a result of the sovereign’s ongoing economic crisis.

His likely replacement, Henrique Meirelles, would likely not be given full control over economic policy, a trader said.

“This clearly calls into question whether he would accept the post in the first place, and opens a can of worms, given the lack of market-acceptable candidates,” he said.

Petrobras posts loss

Also from Latin America, Brazil-based Petroleo Brasileiro SA released earnings data that showed a $1.01 billion-equivalent loss in the third quarter, a trader said.

“The numbers look decent, considering the trouble the market thinks the company is in,” he said. “However, some comments by the CFO regarding capital markets activities has got the market a little concerned, driving bonds lower, and having a knock-on effect on other Brazil corporates.”

Petrobras’ bonds on Friday were down at least one point after weakening into Thursday’s close, another trader said.

Lat-Am in focus

Latin America-focused Pacific Exploration and Production Corp. – formerly known as Pacific Rubiales Corp. – saw selling of its bonds on Friday after Fitch Ratings downgraded the company on Thursday night, a New York-based trader said.

“The curve looks to be pretty close to yesterday’s close,” he said.

Also on Friday, bids were pulled back for Colombia’s banks after taking a hit early Thursday.

Chile-based Corporacion Nacional del Cobre de Chile’s (Codelco) saw bonds move wider as copper continued to break down, he said.

CSCEC draws orders

The new issue of notes from China State Construction Engineering Corp. – $500 million 2.95% notes due 2020 that priced Thursday at 98.954 to yield 3.178%, or Treasuries plus 145 bps – drew a final order book of more than $2.4 billion from 139 accounts, a market source said.

Asia picked up 77% and Europe, the Middle East and Asia picked up 23%, with fund managers buying 49%, banks 37%, insurers 7%, private banks 2% and others 5%.

Goldman Sachs Asia, HSBC, UBS, BOC International, Citigroup, JPMorgan and BNP Paribas were the bookrunners for the Regulation S deal.

The proceeds will be used for overseas projects and other general corporate purposes.

In trading on Friday, the notes were spotted at 99.15 bid, 99.20 offered.

Beijing Properties does deal

On Thursday, China’s Beijing Properties (Holdings) Ltd. – via subsidiary Profit Fast Ltd. – sold $300 million 5½% notes due in 2018 at 99.32, according to a company filing.

Credit Suisse, Guotai Junan International, ICBC International, VTB Capital, Wing Lung Bank, DBS Bank and China Securities International were the bookrunners for the Regulation S deal.

The proceeds will be used for general corporate purposes.

© 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.