Emerging markets: America Movil, Chile, Codelco price notes; Bahrain, Flex on tap

By Rebecca Melvin

New York, May 8 – Stronger credits issued bonds in the emerging markets debt market this past week, with those from Latin America accounting for the bulk of deals for the first full week of May.

America Movil SAB de CV priced $1 billion of 10-year notes, and Chile, as well as Chile’s Corporacion Nacional del Cobre de Chile and metro operator Empresa de Transporte de Pasajeros Metro SA also priced deals.

In addition, LatAm regional lenders including Corporacion Andina de Fomento and Central American Bank for Economic Integration dipped into the market.

Other regions were largely quiet, although CK Hutchison International (20) Ltd., the multinational conglomerate based in Hong Kong, issued $750 million of 2½% 10-year notes. And Hong Kong-based financial institution AMTD Group Co. Ltd. subsidiary AMTD International Inc. announced pricing of a new issue, partially related to an exchange offer which just ended.

The issuer sold $200 million of 7¼% senior perpetual notes at par. An additional second tranche of S$50 million 4½% senior perpetual notes was part of the transaction, also issued at par.

Of the $200 million 7¼% notes, $38.92 million was issued as part of the exchange offer.

In the S$50 million tranche, S$14.74 million was issued in exchange.

Korea East-West Power Co. Ltd. priced $500 million of 1¾% notes due 2025, with BNP Paribas, Citigroup Global Markets Inc., Credit Agricole CIB, HSBC and Merrill Lynch International acting as bookrunners for the Rule 144A and Regulation S deal.

The Seoul-based issuer is a wholly owned unit of state-owned Korea Electric Power Corp.

EM bond funds posted their ninth outflow in the past 10 weeks, weighed by redemptions from sovereign funds with diversified geographic mandates, according to data tracker EPFR.

The outflow occurred despite record inflows into both investment-grade and high-yield corporate bond funds and increased appetite for two Middle East and Africa credits, South Africa and Turkey, for the week ended May 6, EPFR said in its weekly update.

Looking ahead, sovereign and corporate issues revealed plans in the works for upcoming issuance. They included Bahrain, the Slovak Republic, Republic of Serbia, CPI Property Group and Singapore’s Flex Ltd.

Bahrain plans two issues

Bahrain, acting through the Ministry of Finance and National Economy, plans to sell 10-year dollar-denominated senior notes and a 4.5-year senior sukuk, according to market sources.

Both issues will be sold via J.P. Morgan Securities plc as the stabilization coordinator. Bank ABC, Gulf International Bank, HSBC, National Bank of Bahrain and Standard Chartered Bank are the stabilization managers.

Sovereigns eyed

The Slovak Republic plans to price dual tranches of euro-denominated notes of benchmark size due in 2025 and 2032, according to a pre-stabilization notice on Wednesday.

Barclays, Citigroup, Deutsche Bank, HSBC, VUB and Banka/Banca IMI are stabilizing managers of the over-the-counter deal.

Serbia said it would issue a new euro-denominated seven-year bond of benchmark size following a global investor call on Wednesday, according to a market source.

The sovereign had mandated BNP Paribas, Citigroup, Deutsche Bank and JPMorgan as joint lead managers to organize the call.

And CPI, a Luxembourg-based real estate company focused on property investments in central and Eastern Europe, plans to price euro-denominated green bonds due in six years, according to a pre-stabilization notice.

Credit Suisse, Deutsche Bank, HSBC, Nomura and UniCredit are stabilizing managers of the Regulation S deal.

Flex on tap

Flex plans to sell U.S. dollar-denominated senior notes (BBB-) in two tranches, according to a 424B5 filing with the Securities and Exchange Commission.

The notes have a make-whole call and then are redeemable at par.

Joint bookrunners are BofA Securities Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, SMBC Nikko Securities America Inc., BNP Paribas Securities Corp., HSBC Securities (USA) Inc., Mizuho Securities USA LLC, MUFG, Scotia Capital (USA) Inc., UniCredit Capital Markets LLC and U.S. Bancorp Investments Inc.

Proceeds will be used for general corporate purposes, which may include repaying, redeeming or repurchasing debt and for working capital, capital expenditures and acquisitions.

Flex is a Singapore-based consumer and industrial products manufacturer with U.S. headquarters in San Jose, Calif.

American Movil prices

America Movil priced $1 billion of 2 7/8% 10-year senior notes (A3/BBB+/A-) at 99.853 to yield 2.892%, or Treasuries plus 225 basis points, according to an FWP filing with the SEC.

BofA Securities and JPMorgan are the joint lead managers and also joint bookrunning managers alongside BBVA Securities Inc., BNP Paribas Securities and Morgan Stanley & Co. LLC.

Proceeds will be used for general corporate purposes, including the repayment of outstanding debt, as previously reported.

America Movil is a Mexico City-based telecommunications company.

Codelco, Chile price

Chilean copper mining company Codelco priced $800 million of notes due January 2031 (A/A-), according to a company notice and market sources.

The notes priced with a yield of 3.77% or a spread of Treasuries plus 315 bps.

Demand for the notes exceeded $10 billion from more than 320 orders.

Proceeds were expected to be used for general corporate purposes, including debt repayment.

Bookrunners for the transaction were BNP Paribas, HSBC Securities (USA) Inc. Mizuho Securities and Scotia Capital (USA) Inc.

Meanwhile the sovereign, which is another strong credit, priced $1,458,000,000 of 2.45% notes due Jan. 31, 2031 and a €500 million tap of its existing 1 5/8% notes due Jan. 30, 2025 (A1/A+/A), according to FWP filings with the SEC.

The new issue of 2.45% notes due 2031 priced at 99.958 to yield 2.454%, or 180 bps over Treasuries.

The tap issue of 1 5/8% notes due 2025 priced at 102.098 to yield 1.165%, or a spread of 195.8 bps over Bunds.

The add-on notes will be fungible with the €800 million and €400 million tranches issued on Dec. 12, 2014 and May 27, 2015, respectively. The total principal amount outstanding with the additional notes will be €1,641,550,000.

And Empresa de Transporte de Pasajeros Metro placed $1.5 billion of notes (A+/A) in two parts, according to a company notice.

Santiago Metro placed $500 million 3.65% 10-year notes and $1 billion 4.7% 30-year notes.

Proceeds will be used to refinance debt.

The offer was 4.8 times oversubscribed to the tune of $7 billion from 370 orders.

Morgan Stanley and Scotiabank worked as bookrunners for the offering.

The issuer is the owner and sole operator of the subway system in the metropolitan region of Santiago, Chile.

CAF, Cabei price

CAF, a regional lender based in Caracas, Venezuela, priced $800 million of 2 3/8% three-year notes (Aa3/A+/A+) at 99.779 to yield 2.452%, or mid-swaps plus 220 bps, on Thursday, according to a syndicate source.

The SEC-registered notes were sold via joint bookrunners Barclays Bank plc, Citigroup Global Markets Ltd., HSBC Securities (USA) Inc. and J.P. Morgan Securities plc.

Cabei, which is based in Honduras, sold $750 million 2% notes due 2025 at 99.986, according to a notice.

The Rule 144A transaction was the issuer’s first time in the dollar-denominated benchmark market in eight years.

The bank expects to be become a frequent issuer in that market again, as a part of its renewed funding strategy.

Proceeds will be used for an emergency program to support the Central American region and its member countries under the current global pandemic and economic crisis.

CK Hutchison prices

The CK Hutchison deal for $750 million of 2½% guaranteed notes due 2030 (A2/A/A-) was sold via Australia and New Zealand Banking Group Ltd., Merrill Lynch (Asia Pacific) Ltd., CIBC World Markets Corp., Citigroup Global Markets Inc., Credit Agricole CIB, Hongkong and Shanghai Banking Corp. Ltd. and Oversea-Chinese Banking Corp. Ltd.

CK Hutchison is a multinational conglomerate based in Hong Kong.

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