Abu Dhabi's ADCB, China's ICBC price deals; Treasuries climb; Russian banks under pressure

By Christine Van Dusen

Atlanta, Nov. 12 - Abu Dhabi Commercial Bank PJSC and Industrial and Commercial Bank of China Ltd. sold notes on Tuesday as U.S. Treasuries climbed to 2.78%, the highest since early September.

"Another interesting day," a London-based trader said. "Cash prices are lower for the most part, especially on the long end and in the perpetual community. But there remains an element of calm. There is no panic."

Following Monday's Veterans' Day holiday in the United States, bonds from Central and emerging Europe opened weaker on "concerns related to issuance and tapering," a London-based analyst said.

Russian banks, in particular, were under pressure as investors sold OJSC VTB Bank, Gazprombank OJSC and OJSC Russian Agricultural Bank.

"Turkey is about 5 basis points to 10 bps wider," she said.

In other trading, perpetual and long-dated bonds from the Middle East were better offered on Tuesday, the London trader said.

"All fairly orderly, with some local accounts looking to pick up bonds at the bid side or just above there," he said.

Dubai's Jebel Ali Free Zone (Jafza) was "holding well," he said. "It looks a little rich versus Emaar Properties' 2019s, to my mind."

Two-way activity was spotted for Abu Dhabi Islamic Bank's perpetual notes at 98 to 98½ while Dubai Holding's 2017 sterling notes were trading near 103.

"Fairly active morning," he said.

From Latin America, bonds moved a bit wider, with Venezuela standing out as an underperformer, a New York-based trader said.

"Spreads were wider most of the day but did rally back some throughout the afternoon," she said.

Argentina's bonds outperformed, she said, and selling was on the rise following last week's negative momentum.

Middle East in focus

Investors continued to show some interest in Saudi Arabia's Dar Al-Arkan Real Estate Development Co. while International Petroleum Investment Co.'s bonds "held in fairly well," the London trader said. "The spread changes are steady and slightly tighter over the week."

Demand also was spotted for Dubai Electricity and Water Authority's 2020s near z-spread plus 250 bps, he said.

"Supply keeps ticking along, and eventually the technical bonds get picked off," the London trader said.

Recent issues trade

The recent perpetual notes that Dubai's Majid Al Futtaim Holding LLC (MAF) priced at par to yield 7 1/8% traded Tuesday at 100 bid, 97¾ offered, a trader said.

BofA Merrill Lynch, Emirates NBC, Goldman Sachs, HSBC, JPMorgan and Standard Chartered Bank were the bookrunners for the Regulation S deal.

And Dubai-based Topaz Energy and Marine Ltd.'s recent issue of 8 5/8% notes due 2018 that priced at par traded Tuesday at par bid, par offered.

Goldman Sachs, HSBC and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal. Clarkson Capital Markets, DVB Capital Markets, Pareto Securities and RBC Capital Markets were the co-managers.

Buyers for emerging Europe

In trading of bonds from emerging Europe, buyers outnumbered sellers on Tuesday, according to a report from Erste Group Research.

"Clients with a focus on our markets are still awaiting bonds from Serbia, Croatia and Hungary in the near future, so we assume that some money is already sitting on the sideline," the report said.

ADCB sells notes

In its new deal, Abu Dhabi Commercial Bank sold $500 million floating-rate notes due 2017 at par to yield Libor plus 130 bps, a market source said.

"Announced this morning, priced this afternoon," a trader said.

The notes were talked at a spread in the Libor plus 135 bps area.

Deutsche Bank, JPMorgan and Standard Chartered Bank were the bookrunners for the Regulation S deal.

In trading, the notes opened Tuesday at 99.80 bid, 100.10 offered, a trader said.

"Some paper is around on the recent Qatar National Bank floating-rate notes due 2016 on the back of this," he said.

About 60% of the orders for the new ADCB deal were placed regionally, he said.

ICBC does deal

China's ICBC priced a two-tranche issue of RMB 2 billion notes due 2016 and 2018 in a Regulation S deal, a market source said.

The deal included RMB 1.3 billion 3.35% notes due 2016 that priced at par and RMB 700 million 3¾% notes due 2018 that priced at par.

ICBC London, ICBC Asia, ICBC International, RBS, JPMorgan and Standard Chartered Bank were the bookrunners for the transaction.

The bank is based in Beijing.

GEMS sets talk

GEMS Menasa (Cayman) Ltd. set talk at 11¾% to 12% for a dollar-denominated issue of perpetual notes, a market source said.

Abu Dhabi Islamic Bank, Credit Suisse and Morgan Stanley are the bookrunners for the Regulation S deal.

The issuer is a subsidiary of Global Education Management Systems Ltd., based in the United Arab Emirates.

Russian company on roadshow

Russia-based financial services company Renaissance Credit Group is on a roadshow with Goldman Sachs and Sberbank for a dollar-denominated issue of notes, a market source said.

The marketing trip began on Monday and will be held in Europe.

A Regulation S offering is expected to follow.

And Kenya Power could issue global bonds early in 2014.

Marketing trip for BMCE

Morocco's Banque Marocaine du Commerce Exterieur (BMCE Bank) has mandated Barclays, BMCE Capital, BNP Paribas and Citigroup as bookrunners for a roadshow starting Thursday, a market source said.

The Regulation S marketing trip will be held in Europe, the Middle East and Asia.

In June, the company previously announced plans to issue $500 million notes due in five years. A deal did not materialize.

Chinese issuer picks banks

China Overseas Grand Oceans Group Ltd. has mandated BofA Merrill Lynch, UBS, DBS, ICBC International and Macquarie to lead a roadshow this week, a market source said.

The roadshow will begin on Wednesday and will take place in Asia and Europe.

The issuer is part of China Overseas Land & Investment Ltd., a Hong Kong-based construction and development company.

Granvia plans euro notes

Slovakia's Granvia AS is looking to issue euro-denominated notes, a market source said.

The Regulation S issue will be backed by revenue from availability payments from the sovereign.

No other details were immediately available on Tuesday.

Granvia is a Bratislava-based business services and consulting company.

Andino sells bonds

On Monday, Peru's Andino Investment Holding priced $115 million 11% notes due 2020 at par to yield 11%, a market source said.

The notes were whispered at a yield in the 10% area.

BofA Merrill Lynch and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S deal.

The issuer is based in Callao, Peru and owns and operates port infrastructure and offers logistics services.

The final book was more than $170 million, the source said.

Lippo Karawaci postpones

Indonesia's Lippo Karawaci Tbk has postponed a five-year issue of dollar notes (/B+/B), a market source said.

The deal was initially talked in the 11% area.

Credit Suisse was the global coordinator for the Regulation S deal. Credit Suisse and Raiffeisen Bank International were the joint bookrunners.

The proceeds were to be used for refinancing of existing indebtedness, to fund the debt service account and for general corporate purposes.

Lippo Karawaci is a Tangerang, Indonesia-based residential and commercial urban developer.

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