Brazilian Development to hit market Tuesday; China Southern, Votorantim price benchmark deals

By Colin Hanner

Chicago, May 1 – With several markets closed in emerging markets on Monday, activity was lighter than usual, a market source said.

“It seems like everywhere is closed,” the market source said. “It’s a very quiet day.”

A variety of holidays – most notably among them, Labour Day – closed markets in England, Germany, Hong Kong, Mexico, Italy, France, Brazil, Chile, China and India.

Yet, Brazil’s Banco Nacional de Desenvolvimento Economico e Social (Brazilian Development Bank or BNDES) is expected to break the silence on Tuesday when it hits the market with a benchmark dollar-denominated green bond, a market source said, adding it was unusual it did not price late last week. A roadshow for the deal ended last week.

From Friday, several new issues priced benchmark deals, including Guangzhou, China-based, state-owned power network operator, China Southern Power Grid, which sold $900 million 3˝% 10-year notes at 99.183 to yield 3.598% on Friday, a market source said.

Proceeds of the notes (Aa3/AA-/A+) will go toward refinancing existing loans and for general corporate purposes.

Bank of China, CICC, ANZ, HSBC, JPMorgan and UBS were the bookrunners for the deal.

Votorantim widens yield

Sao Paulo, Brazil-based zinc producer Votorantim Metais priced $700 million 5 3/8% 10-year notes at 99.048 to yield 5˝% on Friday, a market source.

Initial yield talk was at 5 3/8%, which later widened to 5˝%, a market source said, adding that a proposed strike by workers at one of Votorantim’s mines in Peru caused the company to go back to the drawing board and revise terms of the deal.

The notes are callable in the final three months at par.

HSBC, Morgan Stanley and JPMorgan were the bookrunners for the deal.

Energuante scales down

Guatemala City-based electric utility company, Energuate, priced a downsized $330 million 5 7/8% 10-year notes at par on Friday, a market source said.

The size of the bond (Ba2//BB) was initially $350 million.

The electricity distributor wrapped up a roadshow on Wednesday, a market source said.

Credit Suisse, ScotiaBank and Banco Santander were bookrunners for the deal.

Distribuidora de Electricidad del Oriente SA (Deorsa) and Distribuidora de Electricidad del Occidente SA (Deocsa) are guarantors for notes, according to Fitch Ratings.

Paul A. Harris contributed to this review.

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