Price talk from Latin America's Minsur, Comcel; Kipco gets attention, called 'a solid effort'

By Christine Van Dusen

Atlanta, Jan. 30 - Peru's Minsur SA and Guatemala's Comunicaciones Celulares SA (Comcel) set price talk for upcoming deals as U.S. Treasuries rallied on a "choppy and volatile" day for emerging markets bonds.

"As largely expected, the Federal Open Market Committee continued the tapering schedule, but U.S. Treasuries continue to rally, with yields on the 10-year at 2.69%," a London-based analyst said.

Two-way flows were seen for Turkish corporates, while the sovereign's bonds were about 5 basis points wider, she said.

"And in Russia, we are seeing some selling in Russian corporates," she said.

Russia's five-year notes were about 2 bps to 3 bps wider while some short-covering was seen on OAO Gazprom.

"The bonds have been impacted by the potential for a share buyback," she said.

From Ukraine, bonds have seen little selling on the back of Standard & Poor's recent downgrade, said Svitlana Rusakova of Dragon Capital.

But bids have taken a hit on uncertainty related to Russia's financing deal.

Looking to Latin America, most investors were skittish on Thursday, a New York-based trader said.

"Dealers are still quite hesitant to step in here as contagion fears abound," he said.

Some corporate credits weakened, with Brazil's Braskem SA closing lower.

"Odebrecht paper is quiet and the 2042s are the only ones trading, weakly, at $94.20," he said.

Widening was seen for long-dated paper from Vale SA and Mexican bank paper was "very quiet," he said.

"Overall, volatility has dropped from Tuesday's levels, even in the midst of daily widening spreads, but if clients begin once again to come in looking to sell off-the-run corporate names, volatility will be back in earnest and liquidity will be severely challenged," he said.

Kipco eyed

Investors were particularly interested in the new notes from Kuwait Projects Co. (Kipco), a $500 million issue of 4.8% notes due 2019 that priced at par.

"The bulk of the activity today centered around Kipco's new five-year transaction," a trader said. "Kipco doesn't come to the market very often and retail investors are pretty familiar with the name, so it feels like the loose bonds are being nicely soaked up."

The notes came to the market at a spread of mid-swaps plus 314.4 bps via BNP Paribas, HSBC and JPMorgan in a Regulation S deal.

From Wednesday afternoon to Thursday morning the notes were trading between 99.80 and 1001/4, a trader said.

"Retail investors are lifting me at par on the new Kipco 2019s," he said.

Notes tick down

Later on Thursday, Kipco's notes were seen ticking lower.

"Trading down about 10 cents, but with limited flow," another trader said.

By the European afternoon, the notes were spotted at 100 1/8 bid, 100 3/8 offered.

"Faster-money types decided to book small gains, and the bond was sold down from 100.15 to par fairly quickly, and then down to 99.80 bid, 99.85, where it held," he said. "Steady tick higher as the day wore on, and she closes at 100¼ bid, 100½ offered. A pretty solid effort, all told. As the month draws to a close I didn't think we'd have just seen the solitary new issue [from the region], but this is fact."

Deal oversubscribed

The final book for Kipco's new deal was more than $3 billion, with 41% of the orders from Europe, 19% from the Middle East, 15% from the United Kingdom, 14% from Asia and 11% from the offshore United States.

Fund managers picked up 58%, banks and private banks 33%, sovereigns and agencies 5% and others 4%.

Puma inches lower

The new issue from Singapore's Puma Energy Holdings Pte. Ltd. - a $750 million issue of seven-year senior notes that priced at par to yield 6¾% on Tuesday - traded at 98½ bid, 99¼ offered on Thursday morning, a trader said.

On Wednesday the notes closed at 99¼ bid, 99½ offered,

"Two-way late yesterday," he said.

Goldman Sachs International and SG CIB were the joint global coordinators. ING, Natixis, RMB and Standard Bank were joint bookrunners.

Proceeds will be used to refinance debt and fund development.

The Singapore-based midstream and downstream oil group has refined petroleum products supply, storage and distribution operations in Central America, the Caribbean, Africa and Australia.

TAQA in focus

Market sources also were whispering about the upcoming issue of notes expected from Abu Dhabi National Energy Co. (TAQA), which in December was seeking bookrunners for the deal. BofA Merrill Lynch, Mitsubishi UFJ Securities, RBS, Societe Generale and Standard Chartered Bank have been linked to the transaction.

Minsur sets talk

Lima-based mining company Minsur set talk in the mid-to-high-6% area for its upcoming issue of $400 million notes due in 10 years, a syndicate source said.

Scotiabank, BofA Merrill Lynch and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal, which is expected to price on Friday.

The proceeds will be used for debt repayment and for general corporate purposes.

"The Minsur 2024s are just hitting the gray market," the New York-based trader said. "They're now up about 1/4."

Guidance from Comcel

Guatemala-based Comcel set talk in the 7¼% area for its upcoming dollar-denominated issue of 10-year notes, a market source said.

Credit Suisse, Citigroup and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay outstanding debt and a dividend to shareholders.

"The Comcel 2024s are flying the gray market," the New York-based trader said.

NCB plans roadshow

Abu Dhabi's National Commercial Bank will set out on Feb. 4 for a roadshow to market an issue of Islamic bonds, a market source said.

GIB Capital, HSBC Saudi Arabia, JPMorgan Saudi Arabia and NCB Capital are the bookrunners for the Regulation S deal.

The roadshow will take place in Saudi Arabia on Feb. 4 and 5.

DeltaCredit postpones deal

Russia's DeltaCredit Bank has postponed its planned issue of ruble-denominated notes, a market source said.

The Rule 144A and Regulation S deal was marketed during a roadshow that ended Tuesday.

Citigroup, Sberbank and Societe Generale led the marketing trip.

The lender is based in Moscow.

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