Femsa, KNOC, Banco del Estado de Chile issue notes; spreads narrow; Bright Food taps banks

By Christine Van Dusen

Atlanta, May 7 - Mexico's Coca-Cola Femsa SAB de CV, Korea National Oil Corp. (KNOC), China's Yuexiu Property Co. Ltd., Banco del Estado de Chile, Banco de Chile and China's Hutchison Whampoa Europe Finance (12) Ltd. priced notes on Tuesday as spreads tightened and investors were drawn to bonds from Bahrain.

The Markit iTraxx SovX CEEME ex-EU index spread on Tuesday narrowed 5 basis points from Friday to 178 bps over Treasuries. The corporate index spread - seen Friday at 223 bps over Treasuries - moved to 216 bps.

"The rates move has seen spreads in this part of the world tighten as the prevailing technical position in the Street continues to be an overriding driver," a London-based trader said. "Fairly impressive performance on the day and week."

In trading, the new issue of notes from Bahrain Telecommunications Co. BSC (Batelco) -$650 million issue of 4¼% notes due 2020 that came to the market at 99.45 - traded near 100.60 bid, 100.70 offered on Tuesday.

BNP Paribas and Citigroup were the bookrunners for the Regulation S-only deal.

"The recent Batelco has done very well," the London trader said.

The deal drew $4.8 billion in orders, with about 38% from the Middle East, 27% from the United Kingdom, 22% from Europe, 12% from Asia and 1% from others.

Asset managers accounted for 38%, banks 34% and private banks 8%. Insurance and pension funds picked up 3%, hedge funds 3% and others 4%.

Meanwhile, some market sources were whispering about a possible deal from Bahrain.

"However, I've seen nothing official," a trader said.

The sovereign's existing 2022s were 15 bps stronger on the week.

"An impressive effort," he said. "Same story on front-dated bonds. Bahrain's 2014s are all disappearing."

Middle East in focus

In other trading from the Middle East on Tuesday, more buyers were noted for Abu Dhabi Commercial Bank's 2018s, the London trader said.

"They're still squeezed," he said.

BBK Bank experienced some two-way activity.

"Higher beta-wise, it's a bit more balanced," he said. "Seen some two-way on Dubai Holdings."

DPWorld's 2017s were holding at 112½ bid, 112¾ offered.

Qtel tries to rally

Qatar-based Qtel International's 2043s attempted to rally on Tuesday before closing at 98½ bid, 98.99 offered, a trader said.

"With lower dollar-priced Qtel bonds, it does feel like there's some paper around," he said.

Sharjah Islamic Bank's notes closed at 99.80.

"Plenty of pent-up retail tickets on the platform today, given the UK holiday yesterday," he said. "But net-net, here at least, it was fairly balanced."

Femsa prices notes

Mexico-based Coca-Cola bottler Femsa priced a two-tranche issue of $1 billion notes due 2023 and 2043 via Citigroup, Goldman Sachs and JPMorgan in a Securities and Exchange Commission-registered deal, a market source said.

The deal included $300 million notes due 2023 that priced at 99.776 to yield Treasuries plus 112.5 bps. The notes were talked at a spread in the mid-100 bps area.

The second tranche, $700 million 4 3/8% notes due 2043, priced at 98.503 to yield Treasuries plus 145 bps.

Chinese corporates do deals

In its new deal, China-based property developer Yuexiu Property priced a $350 million issue of 3.1% notes due 2018 at 99.541 to yield 3.2%, or Treasuries plus 245 bps, a market source said.

Bank of China, DBS, HSBC and Morgan Stanley were the bookrunners for the Regulation S deal.

China-based business conglomerate Hutchison Whampoa priced €1.75 billion 3¾% perpetual notes at par to yield mid-swaps plus 294.1 bps with BofA Merrill Lynch, Goldman Sachs and HSBC in a Regulation S deal.

New issues from Chilean banks

Also on Tuesday, Banco de Chile printed a CHF 50 million issue of 1 1/8% notes due 2018 at 100.863 via Credit Suisse.

The original CHF 200 million issue of notes priced in late-April at 100.194 to yield 1.085%.

And Banco del Estado de Chile priced a $200 million add-on to its 2% notes due 2017 at 100.644 to yield 1.85%, following talk in the 1.9% area.

Citigroup, Deutsche Bank, HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal, which now totals $700 million.

The proceeds will be used for general corporate purposes.

KNOC prints bonds

Korea's KNOC, through Harvest Operations, priced $630 million 2 1/8% notes due 2018 at 99.637 to yield Treasuries plus 145 bps.

The notes were talked at a spread in the 150 bps area.

BofA Merrill Lynch, Barclays, HSBC and RBS were the bookrunners for the Rule 144A and Regulation S deal.

Bright Food picks bookrunners

China-based food and beverage manufacturer Bright Food Group Co. Ltd. has mandated ANZ, Bank of Communications, Barclays, BOCI, HSBC, ING, JPMorgan, National Australia Bank, Rabobank International and RBS to arrange a roadshow for a dollar-denominated issue of notes, a market source said.

The marketing trip will begin on Wednesday and travel through Hong Kong, Singapore and London.

A Regulation S issue of notes is expected to follow.

BOC oversubscribed

The final book for Singapore-based BOC Aviation's $150 million increase of its existing 4 3/8% notes due 2023 was more than $300 million, a market source said.

The notes priced to yield Treasuries plus 263 bps via BOCI and HSBC in a Regulation S deal.

The issue's existing size was $350 million.

Greentown attracts orders

Also oversubscribed was Greentown China Holdings Ltd.'s issue of RMB 2.5 billion 5 5/8% notes due 2016 that priced at par to yield 5 5/8%.

The deal attracted more than RMB 16 billion from 126 accounts, with 83% from Hong Kong and China and 17% from Singapore and others.

Fund and asset managers accounted for 50%, corporates 20%, private banks 15% and banks 15%.

The notes were talked at a yield in the 5¾% area.

BOCI, Deutsche Bank, HSBC, ICBC and Standard Chartered Bank were the bookrunners for the Regulation S deal.

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