New notes from Mubadala, Gazprom, CAF; SECO popular; investors uncertain about Ukraine

By Christine Van Dusen

Atlanta, Nov. 5 – Abu Dhabi’s Mubadala GE Capital Ltd., Russia’s OJSC Gazprom and Venezuela’s Corporacion Andina de Fomento (CAF) were among the issuers to print notes on a Wednesday with tighter spreads for Middle Eastern assets.

“Saudi Electricity Co. was popular today,” a London-based trader said. “The curve there has steepened up lately, with the 2017s to 2023s the best part of 10 basis points to 15 bps better on the week.”

Perpetuals have remained somewhat popular, he said, with the Emirates Islamic Bank issue trading at 101 3/8 bid.

“High-yielders are again a mixed bag,” he said. “Dar al-Arkan Holdings’ 2016s and 2018s are seeing buyers and the 2015s are two-way, like the 2019s.”

Kuwait Energy Co.’s 2019s were off the recent highs, he said, while Dubai Holding’s 2017 sterling notes saw two-way activity between 102.62 and 102.87.

“Long-dated Abu Dhabi names are still being driven higher,” he said.

In other trading, sovereign bonds from Ukraine have, so far this week, suffered as investors have wondered whether the crisis was any nearer an end.

“With the market fearful that diplomatic means to resolve the conflict in the east are getting exhausted, the sovereign took a beating,” said Svitlana Rusakova of Dragon Capital.

The bonds have moved as much as 2 points lower on limited volumes, she said.

“Quasi-sovereigns still outperformed, down a half-point,” she said.

Looking to Turkey, the 6 5/8% notes due in 2045 were seen on Wednesday morning at 119 bid, 119.85 offered, following Tuesday’s 119 bid, 120 offered. The notes priced at 99.026, a London-based trader said.

Russia in focus

From Russia, the sovereign’s 3½% notes due 2019 that priced at 99.195 traded Wednesday morning at 97.12 bid, 97.62 offered after Tuesday’s 97½ bid, 98 offered, a trader said.

The 4 7/8% notes due in 2023 that priced at 98.162 were quoted at 98.20 bid, 98.30 offered on Wednesday after Tuesday’s 98.55 bid, 99.05 offered.

Russia’s 5 7/8% notes due in 2043 that priced at 97.187 were seen at 101¼ bid, 102¼ offered on Wednesday morning after Tuesday’s 102¼ bid, 103¼ offered.

And the sovereign’s 3 5/8% euro-denominated notes due 2020 that priced at 99.533 moved to 101 bid, 102 offered after Tuesday’s 101.38 bid, 102.38 offered, the trader said.

At the end of the European session, Russia’s 2030s were off the highs of the day, spotted between 112 and 112.05, he said.

DIFC off highs

Also on Wednesday, the new issue of notes from Dubai-based DIFC Investments LLC – $700 million 4 3/8% notes due 2024 that priced at par – opened at par bid and closed in Europe off the highs, at about 99.70, the London trader said.

The notes came to the market at mid-swaps plus 185 bps via Dubai Islamic Bank, Emirates NBD Capital, Noor Bank and Standard Chartered in a Regulation S sukuk.

“A few loose bonds around,” he said.

New notes from Gazprom

Russia’s Gazprom sold $700 million notes due in 2015 at a yield of 4.45%, a market source said.

The notes were talked at a yield of 4¾% to 5%.

JPMorgan was the bookrunner for the Rule 144A and Regulation S deal.

Other details were not immediately available on Wednesday.

Gazprom is a Moscow-based natural gas producer.

Mubadala prints bonds

Abu Dhabi’s Mubadala GE Capital priced $500 million 3% notes due Nov. 10, 2019 at 99.375 to yield 3.136%, or Treasuries plus 150 bps, a market source said.

The notes were talked at a spread of 150 bps to 162.5 bps.

Barclays, Citigroup, First Gulf Bank, HSBC and Natixis were the bookrunners for the Rule 144A and Regulation S deal.

The issuer is a specialized finance company based in Abu Dhabi.

CAF sells notes

In its new deal, Venezuela’s CAF priced CHF 225 million 1½% notes due Dec. 1, 2028 at 100.266 to yield mid-swaps plus 42 bps, a market source said.

Credit Suisse and UBS were the bookrunners for the deal.

CAF is a lender based in Caracas, Venezuela.

Bank of China gives guidance

Bank of China Ltd. set talk in the Treasuries plus 300 bps area for an issue of up to $3 billion of notes, a market source said.

Bank of China, BofA Merrill Lynch, HSBC and Wells Fargo Securities are the joint global coordinators, joint lead managers and joint bookrunners for the Rule 144A and Regulation S deal.

Credit Agricole CIB, Deutsche Bank, JPMorgan, Mizuho Securities and Morgan Stanley are the joint lead managers and joint bookrunners.

The issuer is a Beijing-based bank.

Mexico’s KIO does deal

On Tuesday, SixSigma Networks Mexico SA de CV (KIO) priced $500 million 8¼% notes due Nov. 7, 2021 at par to yield 8¼% a market source said.

Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal. Barclays was a co-manager.

The proceeds will be used to repay indebtedness related to an acquisition and for general corporate purposes.

KIO is a Mexico City-based provider of data center services.

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