Akbank, Warba Bank issue notes; Gazprom sets roadshow; trading for TDB notes picks up

By Christine Van Dusen

Atlanta, March 8 – Turkey’s Akbank TAS and Kuwait’s Warba Bank sold new notes – while Russia-based Gazprom OJSC set a roadshow and trading picked up for Burundi’s Eastern and Southern African Trade and Development Bank (TDB) – on a challenging Wednesday for emerging markets assets.

“Market context has certainly not been helpful, with rates selling off and the emerging markets currencies weakening,” a London-based trader said.

TDB’s new deal – $500 million 5 3/8% notes due 2022 that priced at 99.46 to yield 5½% – drew a final order book of more than $2.2 billion from more than 200 accounts, a syndicate source said.

About 22% of the orders came from Asia, 68% from Europe, 2% from U.S. offshore and 8% from Africa and the Middle East.

The notes were talked in the 5 5/8% area.

Commerzbank, MUFG and Standard Chartered Bank were the bookrunners for the Regulation S offering.

On Wednesday, the notes were seen during the European morning at 99¾ bid, 99.95 offered, then moved to 99.80 bid, 100.05 offered.

Meanwhile, Russia’s Gazprom announced that it would set out next week for a roadshow to market a dollar-denominated issue of benchmark-sized notes.

Gazprombank, JPMorgan, Mizuho Securities and SMBC Nikko are the bookrunners for the Moscow-based natural gas producer’s Rule 144A and Regulation S deal.

In its new deal, Turkey’s Akbank priced a $500 million issue of 7.2% notes due March 16, 2027 at par to yield 7.2%, or mid-swaps plus 502.6 basis points, a syndicate source said.

The notes were initially talked at a yield in the 7½% area.

Akbank deal eyed

BofA Merrill Lynch, Citigroup, Goldman Sachs, HSBC, Societe Generale CIB and Standard Chartered Bank were the bookrunners for Akbank’s Rule 144A and Regulation S deal.

“At 7.2%, the bonds come fairly flat to the [Yapi ve Kredi Bankasi AS] 8½% 2026s, which are better rated,” a trader said. “But we prefer the Akbank subs on better fundamentals of the bank, most notably a larger tier I buffer, which indicates better protection of tier II holders.”

And Yapi Kredi’s 8½% 2026s have a one-year shorter call date, “and current spread levels already imply a low extension risk,” he said. “While today’s market moves might prevent an immediate tightening, we nonetheless see room for the new notes to outperform.”

Issuance from Warba Bank

Also on Wednesday, Kuwait’s Warba Bank priced $250 million 6½% perpetual Islamic bonds at par to yield 6½%, or mid-swaps plus 437.4 bps, a market source said.

The notes were talked at 6½% to 6 5/8%.

Ajman Bank, Bank ABC, Emirates NBD, Standard Chartered, Abu Dhabi Islamic Bank, KAMCO Investment Co., Kuwait Finance House, Noor Bank and Warba Bank were the bookrunners for the Regulation S deal.

The proceeds will be used to increase the lender’s capital reserves.

Brazil prints tap

On Tuesday, Brazil priced a $1 billion tap of its 6% global bonds due April 7, 2026 (Ba2/BB/BB) at 107.213 to yield 5%, or Treasuries plus 248.4 bps, according to a filing from the sovereign.

BNP Paribas, BofA Merrill Lynch and Citigroup were the bookrunners for the Securities and Exchange Commission-registered deal.

The original $1.5 billion notes were issued on March 17, 2016 at 99.066 to yield 6 1/8%, or Treasuries plus 419.6 bps.

The notes include a make-whole call at Treasuries plus 50 bps.

The proceeds will be used for general budgetary purposes.

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