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New Pemex long bond trades higher; volatility, commodities prices choke EM deal pipeline
By Paul A. Harris
Portland, Ore., Sept. 14 – Although there was some news on the new issue front on Wednesday, volatility in the global capital markets and weak commodity prices have slowed the new issue market, a syndicate banker said.
The big Petroleos Mexicanos SAB de CV deal (Baa3/BBB+/BBB+) that priced on Tuesday was doing reasonably well on Wednesday, with the short duration 4 5/8% notes due Sept. 21, 2023 at par ½ bid.
The longer duration 6¾% notes due Sept. 21, 2047 (31-year paper) was outperforming at 102 3/8 bid, the banker said.
The deal came in a pair of $2 billion tranches that were both priced at par.
Investors managed to dig in their heels, as the dealers were only able to whittle an eighth of a point off initial price talk on the seven-year paper, while pricing on the 31-year paper never budged from initial talk, the source remarked.
Meanwhile the iShares JPMorgan USD Emerging Markets Bond (EMB) ETF was going out modestly higher on the day at $115.20 per share, up 0.19%, or 22 cents.
Brazilian heavy equipment leasing company Ouro Verde Locacao e Servico (/BB-/BB-) started a roadshow on Wednesday for a possible dollar-denominated offering of notes, according to a market source.
The deal, being led by Bradesco, Santander and Scotia Capital, is expected to be on the road until Sept. 21.
The Curitiba, Brazil-based company leases heavy equipment, machinery and vehicles and also provides fleet managing services.
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