Dar al-Arkan sells bonds with pre-holiday issuance window closing; Argentina outperforms

By Christine Van Dusen

Atlanta, Nov. 20 - Saudi Arabia's Dar Al-Arkan Real Estate Development Co. sold notes on Wednesday as most recent bonds from emerging markets issuers moved wider and lower amid active flows.

During the session, investors in Asia showed interest in International Petroleum Investment Co.'s 2041 bonds, Saudi Electricity Co.'s 2043 bonds and Abu Dhabi National Energy Co.'s 2036s, a trader said.

"Against that, DPWorld's 2037s feel offered and move 14 basis points on the week with paper around," he said.

Among new issues, the deals from Abu Dhabi-based Al Hilal Bank and the Emirate of Ras al Khaimah have performed well, a trader said.

"But the others are all wider and lower," he said.

Case in point, he said, was Wednesday's issue of notes from Saudi Arabia's Dar Al-Arkan Real Estate. The Riyadh-based developer priced a $300 million issue of 5¾% notes due 2016 at 99.323 to yield 6%, or Treasuries plus 541.7 bps.

The notes were initially talked in the 6% area.

"It closed down 65 cents from issue price in the space of an hour," he said. "Limited support in the secondary for this one at the moment."

Bank Alkhair, BofA Merrill Lynch, Deutsche Bank, Emirates NBC and Goldman Sachs were the bookrunners for the Regulation S deal.

"It's only a $300 million deal, so ultimately it should be OK, but we also have the 2018s nicely below par," he said.

A syndicate source said that JSC Gazprom Neft sold dollar-denominated notes due in 2023 during Wednesday's session, but no pricing details were available.

The Rule 144AS and Regulation S notes - via BofA Merrill Lynch, Credit Agricole, Gazprombank and JPMorgan - were talked at a yield in the 6 1/8% area.

Middle East in focus

In other trading from the Middle East, buyers emerged for Emirates Islamic Bank bonds while two-way activity was noted for Dubai Islamic Bank and Dubai's Majid Al Futtaim Holding LLC (MAF).

Sellers were seen for GEMS MEA Sukuk Ltd.'s $200 million 12% perpetual notes that recently priced at par.

"And small interest in Abu Dhabi Islamic Bank," he said.

Lat-Am widens

Most Latin American bonds ended Wednesday's session wider as the Treasury market weakened, a New York-based trader said.

Medium- to longer-dated bonds moved down by a ½ point to 1½ points amid better selling.

Bucking the trend, however, were bonds from Argentina and the 2027s from Venezuela, which moved up, he said.

Granvia gives guidance

Slovakia-based business services and consulting company Granvia AS set initial talk in the mid-swaps plus 230 bps area for its upcoming euro-denominated issue of notes due 2039, a market source said.

Deutsche Bank and Natixis are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance existing loans.

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

"The window is slowly closing," a trader said. "With Thanksgiving next week and month-end next Friday the available slots for issuance are drawing in faster than a U.K. evening in October."

Aldar roadshow planned

United Arab Emirates-based real estate company Aldar Properties PJSC will set out on Thursday for a roadshow to market a dollar-denominated issue of benchmark-sized Islamic bonds, a market source said.

Standard Chartered Bank, Dubai Islamic Bank, First Gulf Bank, Goldman Sachs and National Bank of Abu Dhabi are the bookrunners for the Regulation S deal.

The roadshow will begin in the UAE and Singapore and travel to London and Hong Kong before concluding in London and Switzerland.

The issuer is a real estate company based in Abu Dhabi.

Meanwhile, the company's existing 2014s were "heavy" on Wednesday, a trader said.

"With locals not content with the pull to par and carry they are selling this one to make room for the anticipated new issue coming," he said.

Roadshow ahead for Ooredoo

Qatar's Ooredoo QSC has mandated DBS Bank, Deutsche Bank, HSBC, QInvest and QNB Capital as bookrunners for a Regulation S issue of Islamic bonds, according to a company filing.

A roadshow will begin on Friday and take place in Asia, the Middle East and Europe.

Ooredoo is the Doha-based telecommunications company formerly known as Qtel International.

Suhyup sets marketing trip

Korea's Suhyup Bank will set out on Nov. 25 for a roadshow with Barclays, Citigroup, Societe Generale and Standard Chartered Bank, a market source said.

An issue of notes could follow.

Suhyup Bank is a Seoul-based lender that provides services to the fishing industry in South Korea.

China Overseas postpones

China Overseas Grand Oceans Group Ltd. has postponed its planned dollar-denominated issue of benchmark-sized notes due in five years, a market source said.

The notes were talked at a spread in the Treasuries plus 350 basis points area.

BofA Merrill Lynch, UBS, DBS, ICBC International and Macquarie were the bookrunners for the Regulation S deal.

The notes were to include a change-of-control put at 101%.

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

ICBC sells more notes

On Tuesday, Industrial and Commercial Bank of China Ltd. priced an RMB 2 billion issue of 3.2% notes due 2015 at par to yield 3.2%, a market source said.

DBS Bank, ICBC Singapore, ICBC (Asia), ICBC International and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The transaction followed closely on the heels of a two-tranche issue of RMB 2 billion notes due in three and five years.

That Regulation S 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.

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