New issues from Batelco, ONGC, Albaraka Turk; spreads move in; deal from Nord Gold on deck

By Christine Van Dusen

Atlanta, April 29 - Bahrain Telecommunications Co. BSC (Batelco), India's ONGC Videsh Ltd. (OVL) and Turkey's Albaraka Turk Katilim Bankasi AS priced notes on Monday as spreads tightened slightly and buying was seen for Turkish corporate bonds.

Against this backdrop, Russia's Nord Gold NV gave price guidance, Ukraine's Creative Group set talk, Slovenia mandated bookrunners, and Mexico's Grupo Televisa SAB set out on a roadshow. The day also saw Mexico's Grupo Gayosso SA de CV set talk while Hungary's Nitrogenmuvek Zrt was on a roadshow.

The Markit iTraxx SovX CEEME ex-EU index on Monday narrowed 2 basis points to Treasuries plus 190 bps. The corporate index, which was seen Friday at 237 bps over Treasuries, narrowed 2 bps on Monday.

"Friday's weaker-than-expected US fourth-quarter GDP saw US Treasuries rally, but they are backing off a little this morning," a London-based analyst said. "Asian markets are relatively quiet due to a Chinese and Japanese holiday."

Some selling was seen for Qatar National Bank's 2020s near 99.35 bid, 99.45 amid retail investor demand, a trader said.

"Some nibbling on perpetuals, and some sellers on Qtel International," he said.

From Dubai, DP World's 2017s looked like a good value on Monday.

"There was some Street pressure again near the 112 1/8 bid, 112.20 offered mark, but she closes out at 112¼ bid, 112½ offered and looks OK for a four-year bond," the trader said.

The company's 2037s traded during the afternoon at 1191/2, moving up from the 117 handle seen a few weeks ago.

"Dubai's 2043s are closing well-bid at 100½ on the bid side, and have rallied 15 bps in the past week," he added.

KMG notes mostly unchanged

In other trading on Monday, the recent $3 billion issue of notes due in 2023 and 2043 from Kazakhstan-based KazMunaiGaz National Co. (KMG) opened flat from Friday.

The deal included $1 billion 4.4% notes due 2023 that priced at 99.60 and $2 billion 5¾% notes due 2043 that priced at 99.293.

"The 2023s are at 100½ to 100 5/8 and the 2043s are at par to 1001/4," the analyst said. "The market remains firm."

Ukraine bonds under pressure

Looking to Ukraine, the sovereign's bonds have been under some selling pressure, said Svitlana Rusakova of Dragon Capital.

"A new draft law, which would allow the privatization or lease of the gas transit system, increases the probability of a new gas deal with Russia," she said. "However, we have seen so many false starts by Ukraine in either direction that it makes sense to wait for further confirmations before committing to a view."

Batelco trades up in gray

A fair amount of trading activity on Monday focused on Bahrain-based Batelco's new issue of $650 million 4¼% notes due 2020 that priced at 99.45 to yield 4.342%, or Treasuries plus 325 bps.

BNP Paribas and Citigroup were the bookrunners for the Regulation S-only deal.

The Bahrain-based telecommunications operator is 78% owned by the Kingdom of Bahrain.

The notes closed up 35 cents on the bid side and 50 cents on the offered side in the gray market on Monday.

"Another Gulf region new issue successfully priced and trades higher," a London-based trader said. "Expect this to be free to trade and fairly active tomorrow morning."

Bahrain bonds fare well

Other bonds from Bahrain traded fairly well on Monday.

"The 2014s are locked away and the 2022s and 2022s are barely flinching today on the Batelco issue," the London trader said.

And good two-way activity was noted for Bahrain-based BBK's 2015s.

ONGC sells notes

In its new deal, India's OVL, part of Oil and Natural Gas Corp. Ltd. (ONGC), priced a two-tranche issue of $800 million notes due 2018 and 2023, a market source said.

The deal included $300 million 2½% notes due 2018 that priced at 99.655 to yield 2.574%, or Treasuries plus 190 bps. The notes were talked at a spread in the 190 bps area.

The second tranche of $500 million 3¾% notes due 2023 priced at 99.95 to yield 3.756%, or Treasuries plus 210 bps. The notes priced tighter than talk, set in the Treasuries plus 215 bps area.

Citigroup, Deutsche Bank and RBS were the bookrunners for the Regulation S-only deal.

Albaraka Turk does deal

Turkey-based banking group Albaraka Turk printed a $200 million issue of 7¾% Islamic bonds due in 2023 at par to yield 7¾%, following talk in the 8% area.

BNP Paribas, Al Hilal Bank, Barwa Bank, Emirates NBD Capital and Nomura Securities were the bookrunners for the Regulation S-only sukuk offering.

Sisecam in focus

The London-based analyst also was keeping an eye on Turkey-based glass and chemicals group Turkiye Sise ve Cam Fabrikalari AS (Sisecam), which is on a roadshow for an issue of up to $500 million of notes.

"It's likely to have a maturity of seven to 10 years," she said. "The proceeds are to be used for refinancing and general corporate purposes."

She likes the company's low net leverage, strong ownership and high degree of vertical integration.

"However, free cash flow has been negative for two years and will worsen this year, due to large capital expenditure expansion, she said.

Nord Gold, Creative set talk

Russia-based mining company Nord Gold set initial talk of 6 3/8% to 6½% for a planned issue of dollar-denominated notes due in five years, a market source said.

Citigroup, Goldman Sachs, Jefferies, Natixis, Sberbank and Societe Generale are the bookrunners for the benchmark-sized issue of Rule 144A and Regulation S notes.

And Ukraine-based agro-industrial company Creative Group set talk at the 10¾% area for its planned issue of up to $400 million of five-year notes.

BofA Merrill Lynch, Citigroup, UniCredit and VTB Capital are the bookrunners for the Rule 144A and Regulation S deal.

Slovenia picks bookrunners

Slovenia has mandated BNP Paribas, Deutsche Bank and JPMorgan as bookrunners for its planned dollar-denominated issue of notes, a market source said.

A roadshow for the Rule 144A and Regulation S deal ended Monday.

The proceeds from the deal will be used to repay maturing debt, for budget financing and for the recapitalization of the country's banking sector.

Televisa, Nitrogenmuvek on roadshows

Mexico-based mass media company Grupo Televisa on Monday set out on a roadshow for a peso-denominated issue of notes with Citigroup, Deutsche Bank, HSBC and Morgan Stanley.

The proceeds from the Securities and Exchange Commission-registered deal will be used for general corporate purposes.

And Hungary-based ammonia and fertilizer producer Nitrogenmuvek is on a roadshow for a dollar-denominated issue of notes with BNP Paribas and Raiffeisen Bank International.

The marketing trip began and Monday and will travel through the United States and Europe.

A Rule 144A and Regulation S deal is expected to follow.

Gayosso gives guidance

Mexico-based funeral and cremation services company Gayosso gave guidance in the 8¾% area for a dollar-denominated issue of seven-year notes, a market source said.

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

The proceeds will be used for the prepayment of debt and for general corporate purposes.

Yingde prints bonds

On Friday, China-based industrial gas producer Yingde Gases Group Co. Ltd. priced a $125 million increase of its 8 1/8% notes due 2018 at 103.375, a market source said.

Deutsche Bank and HSBC were the bookrunners for the Rule 144A and Regulation S deal.

The original $300 million deal priced earlier this month at 99.496.

The proceeds will be used for capital expenditures, general corporate purposes and for financing certain indebtedness.

Parkson deal oversubscribed

The final book for Malaysia-based department store company Parkson Retail Group Ltd.'s recent $500 million issue of 4½% notes due 2018 was about $3.9 billion from about 243 accounts, a market source said.

The notes priced at par to yield 4½% via DBS Bank, JPMorgan and Nomura Securities in a Regulation S deal.

About 72% of the orders came from Asia, 9% from the offshore United States and 19% from Europe, the Middle East and Asia.

Funds accounted for 57%, private banks 25%, banks 15%, insurance 2% and agencies 1%.

The proceeds will be used to refinance existing indebtedness and for general corporate purposes.

Sinochem draws orders

Also oversubscribed was China-based business conglomerate Sinochem Group's recent $600 million issue of 5% perpetual notes that priced at par to yield 5%.

About 77% of the orders came from Asia, 13% from Europe and 10% from the United States.

Fund managers picked up 42%, private banks 29%, banks 15%, insurers 8% and public and sovereign wealth funds 6%.

Citigroup, UBS, Goldman Sachs, Morgan Stanley and HSBC were the bookrunners for the Rule 144A and Regulation S deal.

Xinyuan attracts Asian investors

The recent issue of $200 million 13¼% notes due May 3, 2018 that China's Xinyuan Real Estate Co. Ltd. priced at par to yield 13¼% drew more than $400 million from 50 accounts, a market source said.

Barclays, Morgan Stanley and BofA Merrill Lynch were the bookrunners for the Regulation S deal.

About 93% of the orders came from Asia and 7% from Europe, with 43% from private banks, 30% from banks and corporates and 27% from funds.

The issuer is a Beijing-based real estate company.

Ammalay cancels deal

India's Ammalay Commodities JLT has postponed an issue of dollar-denominated notes due in five years, a market source said.

The deal was initially talked at a yield in the 12% area.

Credit Suisse, DBS and UBS were the bookrunners for the deal.

Ammalay is a subsidiary of REI Agro Ltd., a basmati rice processing and marketing company based in Kolkata.

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