Greece concerns linger; PT Bakrie, International Container, Pan American, Braskem price

By Christine Van Dusen

Atlanta, April 30 - Investors and issuers in emerging markets remained in wait-and-see mode on Friday while Greece and officials from the European Union and the International Monetary Fund continued to hash out a bailout plan for the debt-heavy sovereign, market sources said.

The deal was still being negotiated as of late afternoon in New York, leaving "lingering concerns related to the eventual bailout of Greece," an emerging markets strategist said. "That's not hugely impacting our markets but perhaps preventing a better recovery."

Investors are "playing, more or less, a wait-and-see game," he said.

On the primary side, pricing came from Indonesia's PT Bakrie Telecom Tbk., which sold $250 million 11½% notes due 2015 at par to yield Treasuries plus 906 basis points.

Philippines' International Container Terminal Services Inc. priced a $200 million add-on of 7 3/8% notes due 2020 at 102.267 to yield 7%.

And Brazil's Braskem Finance Ltd. priced $400 million 10-year notes at par to yield 7%.

Secondary focuses on LatAm

The day also saw the $250 million 11½% notes from Brazil's Marfrig Overseas, which recently priced at par to yield 11½%, trading "below issue price," a Europe-based trader said.

And Brazil's Fibria Overseas, which on Thursday priced $750 million 7½% notes due 2020 at 99.137 to yield 7 5/8%, or Treasuries plus 389 bps, "went well yesterday and today," he said.

He also pointed out another Latin American deal of interest: Argentina's Pan American Energy LLC, Argentina Branch, which on Friday priced $500 million 7 7/8% notes due 2021 at 98.204 to yield 8 1/8%.

Pan American Energy is majority-owned by BP and, if a possible acquisition goes through, also owned by China's Cnooc Ltd. "So it is quite a nice yield for a paper with such powerful owners behind the back," the trader said. "The only risk is political issues in Argentina."

Under pressure Friday were BES Investimento do Brasil SA's recent issue of $500 million 5 5/8% bonds due 2015 - priced at 98.93 to yield 5 7/8% - and notes from "Brazilian Santander," he said. "That's due to the fears of government weakness in Portugal and Spain. Maybe this offers a buying opportunity for the bonds in Brazil who now trade cheap to Brazilian peers, although they have a strong support from investment-grade countries."

Also in the secondary, some of the higher beta credits were down at mid-afternoon in New York, the strategist said.

"Venezuela and Argentina are both down by about a point," he said.

He pointed out that Monday is a holiday in London, so "that's half the trading considered out," he said. "So there may be some profit-taking and risk positioning."

Quiet Monday expected

He also believes Monday will be quiet for new issuance. "The investor base is so large in London," he said.

After Monday he expects to see Albania's planned euro-denominated bonds come out via JPMorgan and Deutsche Bank. Also on tap for the week, he thinks, is Hong Kong-based Fantasia Holdings Group Co. Ltd.'s planned senior notes via Citigroup Global Markets and Merrill Lynch International.

Several other deals could come during the May 3 week. There's Kazakhstan-based JSC National Atomic Co. (KazAtomProm)'s planned issue of unsecured notes, South Africa-based FirstRand Ltd.'s resumed benchmark issue of five-year bonds, Kazakhstan-based Zhaikmunai's planned issue of notes and Ukraine-based Privat Bank's planned five-year dollar-denominated notes.

Another upcoming deal could be Macau's MCE Finance Ltd., which plans to issue $600 million senior notes in a Rule 144A and Regulation S offering.

Inflows up again

Inflows into emerging markets bond funds totaled $1.22 billion for the week ended April 28, the third-best week on record, according to data tracker EPFR Global.

For April, the funds received more than $5 billion from investors.

"Downgrades to the credit ratings of Greece, Portugal and Spain, with Greece's being cut to junk status, roiled equity and bond markets around the world during the final days of April," according to a statement from EPFR. "Investors responded predictably by pulling money out of Europe ex-UK Regional Equity Funds and continued to funnel substantial amounts of fresh money into the bond funds."

Of the money committed to emerging markets bond funds, more than 75% went toward investing in local currency debt, "versus a year-to-date average of 54% as the spread between US Treasuries and JP Morgan's benchmark EMBI+ index rebounded past the 260 basis point level," EPFR said.

Pan American Energy prices

Pan American Energy priced $500 million 7 7/8% notes due May 7, 2021 (Ba2//BB-) at 98.204 to yield 8 1/8%, a market source said.

Credit Agricole CIB, HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S offering, which was talked at 8 1/8%.

Pan American Energy is a company involved in exploration, development and production of oil and gas in Argentina.

Marfrig prices at par

Brazil's Marfrig Overseas priced $250 million 11½% notes due May 7, 2020 (/B+/) at par, according to an informed market source.

Credit Suisse was the bookrunner for the Rule 144A and Regulation S deal, which is non-callable for five years.

Marfrig Overseas is a beef producer based in Sao Paulo.

Bakrie Telecom issues notes

Indonesia's PT Bakrie Telecom priced $250 million 11½% notes due May 5, 2015 (/B/B) at par to yield Treasuries plus 906 bps, according to an informed market source.

Bank of America Merrill Lynch, Credit Suisse and Morgan Stanley were the joint bookrunners for the Rule 144A and Regulation S offering, which is non-callable for three years.

The deal was talked at 11½% to 11¾%.

Bakrie Telecom is a Jakarta-based telecommunications company.

International Container prices add-on

Philippines' International Container Terminal Services priced a $200 million add-on of 7 3/8% notes due March 17, 2020 at 102.267 to yield 7%, according to a company filing.

HSBC an UBS were the bookrunners for the notes, which will be consolidated to form a single series with the $250 million senior notes issued in March.

Proceeds will be used for general corporate purposes and to refinance $150 million of debt maturing in the next three years.

International Container Terminal Services is based in Manila and develops, manages and operates container ports and terminals.

Braskem prices notes

Brazil's Braskem Finance priced $400 million 7% notes due 2020 (expected Ba1/BB+/BB+) at par, according to a market source.

Bradesco BBI, HSBC and Santander were the bookrunners for the deal, which was talked at 7%.

Braskem initially came with the intention of raising $750 million, a source said.

Braskem Finance is a Cayman Islands-based subsidiary of Braskem, a petrochemical company based in Sao Paulo.

Pan American Energy sets talk

Pan American Energy set price talk for its planned dollar-denominated notes with an 11-year final maturity and a 10-year average life (Ba2//BB-) at 8 1/8%, according to a market source.

Credit Agricole CIB, HSBC and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal, which had a roadshow from April 27 to April 29.

Pan American Energy is a company involved in exploration, development and production of oil and gas in Argentina.

MCE Finance plans senior notes

Macau's MCE Finance is planning to issue $600 million senior notes in a Rule 144A and Regulation S offering, according to a company press release.

The deal is subject to upsizing.

Proceeds will be used to reduce debt under the company's City of Dreams project facility.

MCE Finance is a subsidiary of Melco Crown Entertainment, a developer and owner of casino gaming and entertainment resort facilities focused on the Macau market.

FirstRand bringing notes back

South Africa's FirstRand is expected to resume plans for a benchmark issue of five-year bonds and could price the deal as soon as the May 3 week, a market source said.

The deal had been delayed due to the volcanic ash from Iceland that snarled international air travel, as well as the instability caused by allegations that Goldman Sachs misrepresented information about collateralized debt obligations connected to subprime mortgages.

JPMorgan, Mitsubishi UFJ Financial Group, Standard Chartered and UBS are the bookrunners for the deal.

FirstRand is a Johannesburg-based financial services company.

KazAtomProm plans dollar notes

Kazakhstan's JSC National Atomic Co. (KazAtomProm) is planning an issue of unsecured notes (expected rating Baa3) that could come to market as soon as the May 3 week, a market source said.

Proceeds will be used for general corporate purposes.

KazAtomProm is a government-owned nuclear holding company.

Zhaikmunai to sell notes

Kazakhstan's Zhaikmunai is planning an issue of notes that could come to market as soon as the May 3 week, according to a market source.

Citibank, JPMorgan and ING are the bookrunners for the deal, which is the company's first international bond offering.

Other details were not available Friday.

Zhaikmunai is an oil exploration, development and production company.

Privat Bank plans notes

Ukraine's Privat Bank is looking to issue five-year dollar-denominated notes, according to a market source.

The deal could price as soon as the May 3 week, the source said.

Privat is a commercial bank based in Dnipropetrovsk, Ukraine.

© 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.