IBRD, 361 Degrees issue notes; Russian bonds flatten; Middle Eastern bonds see sellers

By Christine Van Dusen

Atlanta, Sept. 4 – China’s 361 Degrees International Ltd. and the World Bank’s International Bank for Reconstruction and Development sold notes on a Thursday that saw bonds from Russia open flat on the news that the sovereign and Ukraine were both willing to consider a ceasefire.

“News of a potential ceasefire spurred a 2 point rally in the sovereign, yet considerable caution remained,” said Svitlana Rusakova of Dragon Capital. “Quasi-sovereigns and corporates recorded similar gains in very limited volume.”

Muting enthusiasm was the expectation that further sanctions will be levied against Russia.

Also impacting market sentiment: The European Central Bank surprised investors by cutting already-low interest rates.

Middle Eastern bonds saw more sellers than buyers on Thursday, with long-dated bonds getting the most attention, a London-based trader said.

Good volume went through on Dubai’s 2022s and 2023s, he said, and buyers showed interest in Saudi Electricity Co.’s 2043s and 2044s as well as Morocco’s 2042s and bonds from Qatar.

From Latin America, Petroleo Brasileiro SA (Petrobras) saw better selling on Thursday, a New York-based trader said, with solid volume and spreads moving slightly wider.

But most names took “a bit of a breather,” he said, amid limited liquidity.

Mexico’s Cemex SAB de CV’s two-tranche issue of dollar- and euro-denominated notes traded up between 25 cents and 75 cents in the gray market, the New York trader said.

The dollar benchmark notes due in January 2025 were talked at a yield in the 5 7/8% area. The proceeds will be used for general corporate purposes and to fund a tender offer for dollar notes.

Cemex sets talk

Cemex’s €300 million notes due in January 2022 were talked at a yield in the 5 1/8% area. The proceeds will be used for debt refinancing and general corporate purposes.

BNP Paribas, BofA Merrill Lynch, JPMorgan and Santander are the active bookrunners for the Rule 144A and Regulation S deal. BBVA, Credit Agricole CIB, Citigroup, HSBC and ING are the passive bookrunners.

Meanwhile, the company’s existing 2024s continued to trade lower but the rest of the curve performed fairly well, he said.

361 Degrees sells notes

China’s 361 Degrees International priced RMB 1.5 billion 7½% notes due Sept. 12, 2017 at 99.472 to yield 7.7%, a market source said.

BofA Merrill Lynch, CLSA and ING were the bookrunners for the Regulation S deal.

The proceeds will be used to refinance debt and for general working capital purposes.

361 Degrees is a sportswear company based in Xiamen City, China.

Primary hosts IBRD

The World Bank’s IBRD priced RMB 300 million 2.4% notes due Dec. 10, 2014 at par to yield 2.4%, according to an announcement from the lender.

Credit Agricole CIB was the bookrunner for the deal.

“The bond was issued to respond to demand from an institutional investor in the Middle East and North Africa region for a renminbi asset of high credit quality, and to continue with the World Bank’s support of the development of the renminbi market,” the announcement said.

The IBRD offers loans to developing countries and is based in Washington, D.C.

West China Cement sets talk

West China Cement Ltd. set talk at 6½% to 6 5/8% for a $400 million issue of five-year notes, a market source said.

Credit Suisse and Nomura Securities are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance the $400 million 7 % notes due 2016, which were issued on Jan. 25, 2011.

The cement manufacturer and distributor is based in Xi’an, China.

Serbia considers issuance

Serbia is considering an issue of up to $750 million of new notes, a market source said.

No other details were immediately available on Thursday.

Brazil prices add-on

On Wednesday, Brazil priced a $1 billion issue of 4¼% notes due Jan. 7, 2025 at 103.05 to yield 3.888%, or Treasuries plus 147 basis points, according to a filing from the sovereign.

Banco BTG Pactual, Citigroup and Morgan Stanley were the bookrunners for the Securities and Exchange Commission-registered deal.

The sovereign went on to price an additional $50 million at the same price.

The proceeds will be used for general budgetary purposes.

The original issue of $3.25 billion priced on Nov. 1, 2013.

Issuance from EPM

Also on Wednesday, Colombia’s Empresas Publicas de Medellin ESP priced COP 965.745 billion 7 5/8% notes due Sept. 10, 2024 at par to yield 7 5/8%, a market source said.

The notes were talked at a yield in the high-7% area.

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

The issuer is a Medellin, Colombia-based public services company.

Vista Land final book

The final book for Philippines-based Vista Land and Lifescapes Inc.’s $125 million add-on to its 7.45% notes due April 29, 2019 was about $300 million, a market source said.

The notes priced at 102 to yield 6.935%, a market source said.

About 91% of the orders were international and 9% were from the Philippines.

The original $225 million issue priced at 99.284 to yield 7 5/8%.

HSBC and DBS were the bookrunners for the Regulation S deal.

The proceeds will be used finance capital expenditures and for general corporate purposes.

The homebuilder is based in Mandaluyong City, Philippines.

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