New issue from Chile's BCI; Lat-Am corporates struggle; Ukraine notes show resilience

By Christine Van Dusen

Atlanta, Aug. 29 - Chile's Banco de Credito e Inversiones SA priced notes on Thursday as liquidity remained challenging and flows were mostly balanced, with decent performance from Chile-based Cencosud SA's 2021s and 2023s and Brazil-based Braskem SA's 2021s and 2022s.

"Liquidity remains testing," a trader said. "Flows, for choice, were pretty balanced overall today, however."

U.S. Treasuries were spotted at about 2.8% on Thursday.

"It was a mixed bag once again as gyrations in the U.S. Treasury market and supply and demand dynamics dominate," a London-based trader said. "Of course the Syrian situation remains firmly on the market's radar and with limited liquidity tomorrow and a U.S. holiday Monday it realistically could be Tuesday before some real liquidity returns."

Latin American corporates struggled in trading on Thursday, a New York-based trader said.

Some better selling was seen, with spreads widening again.

"Most dollar-priced credits are lower, with some getting hit so far this morning at what looked to be pretty low levels," he said. "Credits are ticking a little lower each day with little to no volume," he said. "Petrobras' 2023s continue to be the short of choice, no longer the Vale SA 2022s, which are trading another 5 bps wider."

Sovereign bonds from Latin America were mixed, with Argentina bonds falling and Venezuela bonds bouncing, another New York-based trader said.

Venezuela's 2027s traded at 81, and PDVSA's 2017s were seen at 89.85.

Selling outpaced buying early in the session. But the flows were more balanced by later in the day, he said.

"Volumes picked up over the very low levels of the prior days as we approach month-end tomorrow with a holiday-shortened trading day in store," he said.

Ukraine bonds get a lift

Some bonds from Ukraine were getting a lift after the mid-week mark, said Svitlana Rusakova of Dragon Capital.

The sovereign's 2017s saw a low offer at 981/4.

"Ukraine's 2023s displayed resilience, hit at 85½ a few times then lifted at 86 5/8," she said. "Corporates were well offered."

Bahrain, Qatar widen

Bonds from Bahrain continued to widen, moving out on Thursday as much as 50 bps on the week.

"The recent 2023s traded between 96 and 96 5/8 today, having opened the month printing at 1011/2," a trader said.

Qatar bonds also widened and saw better sellers, with the 2020s and 2022s between 12 bps and 17 bps wider on the week.

"There's been a steepening in International Petroleum Investment Co. as well, with the 2020s and 2022s out by 18 bps to 23 bps on the week," he said. "Yet we're seeing the 2015s, 2016s and 2017s hold firm."

Perpetuals 'choppy'

The perpetual notes from Abu Dhabi Islamic Bank, which priced at par, traded on Thursday at 96.87 bid, 98.37 offered, a trader said.

On Wednesday the notes were spotted at 96½ bid, 98 offered.

"It's very tricky finding some of these bonds," he said. "Granted, they are tightly held, which will protect them in a downtrade, downdraft. But they are not the most liquid of beasts."

The perpetuals that Dubai Islamic Bank priced at par were quoted Thursday at 93¾ bid, 95¼ offered.

The notes traded Wednesday at 93½ bid, 95 offered.

"Perpetuals are obviously choppy," he said.

Dubai corporates in focus

Dubai's Jebel Ali Free Zone's (Jafza) 2019s were 40 bps wider on the month, a trader said.

DPWorld's 2017s were quoted Thursday in the 107¼ to 107¾ context, about 12 bps wider on the week.

"DPWorld results came in this morning, posting a 9% increase in first-half profit," he said. "They also said they had no plans to issue bonds or sukuks. Their 2017s firmed up a little today, trading between 107¼ and 1071/2."

Grupo R plans roadshow

In deal-related news, Mexico's Grupo R SA de CV has mandated Credit Suisse, Citigroup, Deutsche Bank and Santander to arrange a roadshow to market a dollar-denominated issue of notes, a market source said.

The roadshow will be held from Sept. 2 to Sept. 11 in Latin America, the United States and Europe.

A Rule 144A and Regulation S deal is expected to follow.

The proceeds will be used to repay debt relating to the company's ultra-deep water assets.

Grupo R is based in Col. Veronica Anzures, Mexico.

BCI prices notes

In its new deal, Chile's Banco de Credito e Inversiones priced CHF 200 million 1¼% notes due 2016 at 99.934, a market source said.

Credit Suisse was the sole bookrunner for the transaction.

Other details were not immediately available on Thursday.

BCI is a lender based in Santiago, Chile.

Kexim does deal

On Wednesday, Export-Import Bank of Korea (Kexim) priced a $300 million add-on to its existing 3¾% notes due 2016 at 105.767, according to a company filing.

HSBC was the sole bookrunner for the Securities and Exchange Commission-registered deal.

The original $700 million issue priced on April 20, 2011.

Kexim is a lender based in Seoul, South Korea.

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