Primary sees issuance from Isbank, CLP Power, BR Malls, others; record inflows seen for EM

By Christine Van Dusen

Atlanta, Oct. 18 - The pipeline for emerging markets bonds broke open on Thursday, with deals pouring out from such issuers as Turkiye Is Bankasi AS (Isbank), CLP Power Hong Kong Financing Ltd., Korea Railroad Corp., India's Bharat Petroleum Corp. Ltd., Brazil's BR Malls Participacoes SA and Thailand's PTT plc.

"With continued record inflows and the low-rate environment set in place, new issuance will be quite strong right into the new year," a New York-based trader said.

This influx of new deals came against the backdrop of the E.U. summit and the release of higher weekly jobless claims from the United States.

"We expect a slight correction in most markets," according to a report from UFS Investment Co.

In its new deal, Turkey-based lender Isbank priced a $1 billion issue of 6% notes due Oct. 24, 2022 at par, a market source said.

The notes priced tighter than talk, set at 6¼% to 6½%.

Deutsche Bank, JPMorgan, Mitsubishi UFJ Securities and Standard Chartered were the bookrunners for the Rule 144A and Regulation S deal.

Electric company CLP Power Hong Kong priced a two-tranche issue of $600 million notes due in 2023 and 2027 in a Regulation S-only deal, a market source said.

The deal included $300 million 2 7/8% notes due April 26, 2023 that priced at 98.917 to yield 2.996%, or Treasuries plus 120 basis points.

The second tranche totaled $300 million 3 3/8% notes due Oct. 26, 2027 that priced at 99.174 to yield 3.446%, or Treasuries plus 170 bps.

And Korea Railroad Corp. sold CHF 300 million 1% notes due Nov. 16, 2018 at 100.578 to yield mid-swaps plus 55 bps, a market source said.

RBS and UBS were the bookrunners for the deal.

Bharat, BR Malls sell notes

In another new deal, India-based gas and oil company Bharat Petroleum priced a $500 million issue of 4 5/8% notes due Oct. 25, 2022 at 99.305 to yield Treasuries plus 290 bps, a market source said.

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

And Brazil-based shopping mall company BR Malls Participacoes priced a $175 million increase of its 8½% perpetual notes at 108.5, according to a source close to the deal.

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

PTT prices bonds

Thursday also saw Thailand-based energy company PTT price $1.1 billion notes due Oct. 25, 2022 and 2042, with both tranches at a spread of Treasuries plus 160 bps.

The 2022 tranche totaled $500 million 3 3/8% notes that priced at 99.605 to yield 3.422%, or Treasuries plus 160 bps.

The 2042 tranche totaled $600 million 4½% notes that priced at 98.702 to yield 4.58%, or Treasuries plus 160 bps.

Barclays, Citigroup, Deutsche Bank and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Sberbank launches deal

In other deal-related news, Russia-based lender Sberbank launched a $2 billion issue of notes due in 2022 to yield 5 1/8%, a market source said.

HSBC, JPMorgan and Sberbank are the bookrunners for the Rule 144A and Regulation S deal.

This followed the late-Wednesday pricing of China-based property developer Yuzhou Properties Co. Ltd.'s $250 million 11¾% notes due Oct. 25, 2017 at 99.263, a market source said.

BOCI, HSBC and UBS were the bookrunners for the deal.

Home Credit prints notes

Russia's Home Credit and Finance Bank printed $500 million notes due April 24, 2020 at par to yield 9 3/8%, or Treasuries plus 862.4 bps.

Citigroup, HSBC and Sberbank were the bookrunners for the Rule 144A and Regulation S transaction.

Also late Wednesday, Russia's Bank of St. Petersburg priced a $100 million issue of 11% notes due Oct. 24, 2018 at par, in line with talk, via bookrunners BNP Paribas and UBS in a Regulation S-only deal.

LatAm corporates move higher

In trading from Latin America, corporate bonds moved higher for another consecutive day, a New York-based trader said.

High-grade names from Brazil and Colombia led the way while Mexico's Cemex recovered from the pervious day's 2-point drop for its 2022s.

"They are in heavy, continuous demand as news from Cemex-land continues to be overall positive with the overall market tone also helping the credit out," he said.

Meanwhile, it was a slower session for Mexichem after two busy weeks.

"We're barely seeing any gains at all," he said. "They are starting to look a little rich versus other BBB- paper."

Mexico-based America Movil SAB de CV's paper moved tighter, though not as much as bonds from Brazil-based Petrobras and Vale SA.

"Street volume continues to be one-way," he said. "Paper is difficult to gather in size for any credit."

Codelco bonds tighten

Notes from Chile's Corporacion Nacional del Cobre de Chile (Codelco) have been tightening for about two weeks, the New York trader said, with the 10-year narrowing by 15 bps to 18 bps.

"New issues have come at a steady pace," he said. "We will be breaking records for issuance for fiscal 2012, which is predicted to be about $95 billion, now sitting at $80 billion, breaking the all-time high set in 2011 at $76 billion."

Ukraine notes gain

Bonds from Ukraine saw more gains, with the 2017s setting a new record high to close at 110.25, said Svitlana Rusakova of Dragon Capital.

"Benchmark Ukraine 2020s and 2021s also refreshed their all-time highs," she said.

The 2020s hit 104.5 bid, 105.5 offered while the 2021s were seen at 105.5 bid, 106.5 offered.

Naftogaz and Oschadbank also gained during the week, and Mriya Holdings saw offers at par, she said.

"However, price moves in other names were limited after a few sellers emerged," she said.

Flat day for Russia bonds

Looking to Russia, dynamics remained flat for eurobonds, according to a report from UFS Investment Co.

After seeing some selling on Wednesday in the corporate sector, on Thursday Alfa Bank's 2017s and 2021s moved up 0.6% while long-term bonds from Vimpelcom added more than ¼%.

"Flat dynamics will continue," UFS said.

Turkish corporates in focus

In other news, Turkey-based lender Finansbank is planning a dollar-denominated issue of notes with bookrunners Citigroup, Morgan Stanley, Standard Chartered and RBS, a market source said.

And Turkish beverage company Anadolu Efes Biracilik Ve Malt San set initial price talk at the Treasuries plus 225 bps area for its planned $500 million 10-year issue of notes.

Bank of America Merrill Lynch, HSBC, JPMorgan and RBS are the bookrunners for the Rule 144A and Regulation S deal.

"Following the recent new issue frenzy from Turkish financials, Anadolu Efes is a welcome addition to the Turkish corporate universe," a London-based analyst said, noting the deal is "likely to generate substantial interest from investors despite the somewhat tight guidance."

Spreads should receive support, going forward, from the company's strong ratings and the perceived exclusivity of the issue, she said.

Roadshows ahead

State-owned power company China Guangdong Nuclear Power Group has mandated ABC International, BOCI, China Development Bank and ICBC to market a renminbi issue of notes during a roadshow, a market source said.

The roadshow for the Regulation S transaction will begin on Monday.

And Indonesia-based natural gas producer PT Energi Mega Persada Tbk. is planning a roadshow beginning Tuesday for an issue of dollar notes, a market source said.

Bank of America Merrill Lynch, Credit Suisse and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

Gazprombank revises talk

Russian lender Gazprombank has revised talk for its dollar-denominated issue of benchmark-sized perpetual notes to 8% to 8¼%, a market source said.

The Regulation S deal was initially talked at the mid- to high-8% area.

Credit Suisse, Goldman Sachs, GPB Financial Services and HSBC are the bookrunners for the notes, which will be non-callable for 5½ years.

Pricing is expected to take place on Friday.

Banco Industrial plans notes

Wednesday also saw Guatemala's Banco Industrial SA planning a roadshow from Monday to Wednesday for an issue of Rule 144A and Regulation S notes, a market source said.

Bank of America Merrill Lynch and Citigroup are the bookrunners for the deal, which will be marketed in London, Santiago, Boston, Lima, New York, Los Angeles and San Francisco.

And Slovenia gave initial price guidance in the low 6% area for its planned issue of dollar-denominated and benchmark-sized notes due in 2022, a market source said.

BNP Paribas, Deutsche Bank and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

A roadshow for the deal ends on Friday.

Caribbean Financial on deck

Caribbean Financial Group Holdings LP plans to price a $175 million offering of seven-year senior secured notes early next week with bookrunner Jefferies, a market source said.

Proceeds from the Rule 144A and Regulation S deal will be used to refinance debt.

Caribbean Financial is a Guaynabo, Puerto Rico-based consumer finance company operating in Panama, Aruba, Curacao, Trinidad & Tobago, St. Maarten and Bonaire.

Paul A. Harris contributed to this article

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