Temasek, Aspial, Investec print bonds amid mixed global data, moderate volumes for EM debt

By Christine Van Dusen

Atlanta, July 16 - Two issuers from Singapore - Temasek Holdings and Aspial Corp. - joined South Africa's Investec Ltd. in issuing notes on a Monday that saw moderate volumes and continued demand for long-dated emerging markets bonds.

This activity took place against the backdrop of mixed global economic data.

"There were misses in China in GDP and industrial production, and consumer confidence data in [the United States] were weaker than expected," according to a report from Barclays Capital. "However, the resilience of risky assets suggests that markets may have taken heart from higher-frequency data, such as Chinese investment demand, as well as continued policy steps to channel credit into the major economies."

But overall, the global economic picture remains cloudy, Barclays said.

"Although we continue to believe that the global economic prospects are likely to recover into the second half of the year, data are likely to remain choppy in the near term and keep investors concerned about the future trajectory," the report said. "The world economy has slowed by more than we and the market had been expecting, particularly in EM, but risk sentiment is holding up fairly well."

Longer-duration bonds made "awesome moves" on Monday, a London-based trader said.

Particular standouts included International Petroleum Investment Co.'s 2041 bonds, which moved higher while Abu Dhabi National Energy Co.'s 2036 bonds were bid only.

"They are dragging up the bellies of their respective curves with cash prices hitting fresh highs, in many cases," he said.

Temasek, Aspial sell notes

In its new deal, Temasek priced $1.7 billion bonds due 2023 and 2042, according to a syndicate source.

The company priced $1.2 billion 2 3/8% 10.5-year bonds at 99.163 to yield 2.466%, or Treasuries plus 100 basis points.

A $500 million 3 3/8% 30-year tranche sold at 97.653 to yield 3.502%, or Treasuries plus 95 bps.

Citigroup, Deutsche Bank, Goldman Sachs and UBS were bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used to fund the company's "ordinary course of business," according to a company release.

Jewelry company and boutique operator Aspial priced a $S30 million issue of 5% notes due July 27, 2015 at par to yield 5%, according to a market source.

HSBC and United Overseas Bank were the bookrunners for the Regulation S deal.

Investec does deal

Also on Monday, South African financial products company Investec sold $300 million 3 7/8% notes due July 24, 2017 at 99.775 to yield Treasuries plus 310 bps, a market source said.

HSBC, ING, Investec, RBS and Standard Chartered Bank were the bookrunners for the Regulation S deal.

"Obviously this is a huge window and opportunity to issue, however we are about to have Ramadan and extended summer holidays ... so it's highly unlikely we will see more supply until September, at this rate," the London trader said.

Five-year credit default swaps for South Africa were at 140 bps mid, a trader said.

"Bonds are super well supported," he said. "There remains a lack of issuance out of South Africa that accounts can get involved in. The sovereign is just a rock.

Czech Rail gives guidance

In other deal-related news, railway operator Ceshe Drahy AS (Czech Railways) set price guidance at mid-swaps plus 312.5 bps for its planned €300 million issue of seven-year notes, a market source said.

Barclays Capital, Citigroup and ING are the bookrunners for the Regulation S deal.

A roadshow started July 11.

Emaar bonds 'well liked'

In the secondary market on Monday, Dubai-based Emaar Properties' recent $500 million 6.4% notes due 2019, which priced at par to yield mid-swaps plus 519.3 bps, opened at 101.75 bid, 102.50 offered, unchanged from late Friday.

The notes closed at 102.87 bid, 103.37 offered.

"Offers now come with a 103 handle on the new Emaar," a trader said. "We traded the [existing 2016s] at 109 after the announcement of the new 2019s. It's difficult finding them sub-111.50 now. It's a good name, well liked."

Bahrain sees some action

The Kingdom of Bahrain's recent $1.5 billion issue of 6 1/8% notes due July 5, 2022 was quoted Monday at 100.37 bid, 100.62 offered.

On Friday the notes traded at 100.25 bid, 100.50 offered.

The notes priced at 99.867 via Citigroup, Gulf International Bank, JPMorgan and Standard Chartered Bank in a Rule 144A and Regulation S deal.

And the $500 million issue of 5¼% seven-year notes from Dubai's Majid al Futtaim that came to the market at par was trading Monday at 100.30 bid, 100.80 offered, after trading Friday at 100.30 bid, 100.60 offered.

JPMorgan, National Bank of Abu Dhabi, Barclays Capital, Standard Chartered and UBS were the bookrunners for the Regulation S transaction.

Qatar notes in demand

The recent two-tranche issue of $4 billion notes due 2018 and 2023 from Qatar received solid support and demand on Monday, a trader said.

The 2018 notes opened at par bid, 100.10 offered and closed at 100.05 bid, 100.15 offered after trading Friday at 99.98 bid, 100.08 offered.

The 2023 notes, which traded Friday at 101 bid, 101.10 offered, were seen Monday at 101 bid, 101.15 offered before ending the day at 101.20 bid, 101.40 offered.

The deal - issued by funding vehicle SoQ Sukuk A QSC - included $2 billion 2.099% notes due 2018 that yielded 2.099%, or mid-swaps plus 115 bps.

The second tranche totaled $2 billion 3.241% notes due 2023 that yielded 3.241%, or mid-swaps plus 155 bps.

Barwa Bank, Deutsche Bank, HSBC, QInvest and Standard Chartered Bank were the bookrunners for the Regulation S deal.

DPWorld wakes up

In other trading from the Middle East, Dubai-based DPWorld saw its 2037 notes move to 102.50 on Monday after printing just north of par on Friday.

"Slow-moving DPWorld has awoken from a long slumber," a trader said. "Full offer now is 103.50, or a 6.56% yield. Given some of the moves out there and the demand for [Middle Eastern] long-duration paper, this one can probably still tick higher."

The notes closed up two points.

Meanwhile, paper from Dubai Holding was performing well, he said.

"I think the 2014s look interesting and appealing in the low 95s," he said. "Remember, they have a yen deal due before this one, but given their recent track record this one should be fine."

Halkbank bonds tick up

The recent upsized $750 million issue of 4 7/8% notes due July 19, 2017 from Turkey's Turkiye Halk Bankasi (Halkbank) that priced at 99.453 to yield 5% traded at 100.37 bid, 100.62 offered on Monday.

On Friday, the notes traded at 100.12 bid, 100.25 offered and closed at 100.43 bid, 100.56 offered.

Bank of America Merrill Lynch, Citigroup and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

Russian bonds stay in favor

From Russia, the recent $1 billion issue of 6.025% notes due 2022 from Moscow-based lender Vnesheconombank that priced at par was trading Monday at 104.69 bid, 105.31 offered.

Credit Agricole, JPMorgan, Deutsche Bank and HSBC were the bookrunners for the deal.

Demand was significant for many Russian bonds on Monday, a trader said.

"I keep expecting Russia names today to have a pullback but the demand was super impressive again," he said.

Argentina among riskiest

Argentina was the third-riskiest sovereign credit in the second quarter of this year, according to the new CMA global sovereign credit risk report.

"Argentina's surprise move to seize control of [Spain's] Repsol mid-May triggered a widening of [the credit default swap rate], which was relatively stable to that point, indicating the move was not welcomed by investors, raising concerns for future economic development," the report said.

Greece and Cyprus ranked first and second on CMA's list, respectively.

"Protection prices in Greece started to trade a few weeks after the default on the new debt, averaging 79% with a 9-point bid/ask throughout the quarter," CMA said. "Greece CDS remains highly illiquid, with the market pricing in an extremely high chance of default, implying the debt exchange has done little to help Greece's debt problems."

Portugal ranked fourth on CMA's list, followed by Pakistan, Venezuela, Ukraine, Ireland, Spain and Egypt. Regionally, spreads widened by about 15% for Eastern Europe and 8% for the Middle East during the quarter, CMA reported.

Aleesia Forni contributed to this report.

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