Ecuador prices $2.5 billion of notes; Middle East, Latin America new deal calendar grows

By Rebecca Melvin

New York, Oct. 18 – Although a handful of deals were quietly roadshowing in the background early this week, the emerging primary market sparked back to life on Wednesday.

The Republic of Ecuador launched and priced $2.5 billion of 10-year senior notes at par to yield 8 7/8% on Wednesday. The deal, marketed via J.P. Morgan, Credit Suisse and Deutsche Bank, came at the tight end of revised guidance in the 9% area and down from 9¼% initial talk.

The market was active with some roadshows early in the week, but it had been notably quiet in terms of announcements and pricings. Market sources said there was no particular reason that the marketed quieted and asserted that it is still strong, with issuers expected to continue to come to market at a steady clip.

On Thursday, Brazilian air operator Azul SA was expected to price $300 million to $400 million of 2024 notes being marketed with Citigroup and J.P. Morgan as lead bookrunners, and sources said Banco do Brasil was in the market with a deal, but further details were not available by Prospect News’ deadline.

Chile’s SACI Falabella also joined the calendar on Wednesday with an up to $400 million of senior unsecured notes that will be roadshowing through Friday.

In the Middle East, investors were eyeing new deals announced Wednesday, including Abu Dhabi Crude Oil Pipeline LLC’s about $3 billion of senior notes in 12-year and 30-year tranches, Bahrain-based Nogaholding’s deal for $1 billion of 10-year dollar notes and Arab Petroleum Investments Corp.’s five-year dollar sukuk.

The primary market came to life on Wednesday after remaining hushed on Monday and Tuesday. One trader said he did not know how or why this was the case.

Nogaholding was expected to price on Wednesday, and fair value was seen in the 7% to 7¼% area, according to MUFG analyst Trieu Pham, who suggested a new issue premium of about 25 basis points due to the weaker investor base compared to other Middle East and Africa sovereigns being that Nogaholding is a first-time issuer in the international market.

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