China's Powerlong, Fantasia do new deals; flows limited due to holidays; Batelco notes in demand

By Christine Van Dusen

Atlanta, May 20 - China's Powerlong Real Estate Holding Ltd. sold notes on Monday amid limited activity, but there was solid demand for names like Bahrain Telecommunications Co. BSC (Batelco), Dubai Water and Electricity Authority (DEWA) and Saudi Electricity Co.

"Interesting market," a London-based trader said. "Flow-wise it was a little limited, with a host of euro countries off for holidays."

Abu Dhabi's Dolphin Energy saw its 2019 notes drop 2 points from recent highs, the London trader said.

"Looks interesting again here," he said.

The recent notes from Bahrain Telecommunications Co. BSC (Batelco) - $650 million of 4¼% notes due 2020 that priced at 99.45 to yield 4.342% - were in demand on Monday at 100.25, he said.

"Abu Dhabi National Energy Co.'s long end is still well offered," he said. "The 2023s traded down a few times. It also feels like some International Petroleum Investment Co. paper is washing around."

Notes from Bahrain have pulled back from recent highs, a trader said.

Buyers were sighted for Saudi Electricity's 2022s and 2023s, he said, while the 2043s have pulled back. Still, the latter notes are tighter on the month.

"Elsewhere, there were buyers of Sharjah Islamic Bank's 2018s, demand for DEWA's 2016s and 2020s and two-way on Abu Dhabi Commercial Bank's 2018s and 2023s," he said.

"I'd still like some three- to seven-year bonds with a little spread and yield to smooth out the U.S. Treasury gyrations."

Meanwhile, China's Yanzhou Coal Mining Co. Ltd. was on a roadshow, and China-based Fantasia Holdings Group Co. Ltd. and Saudi Arabia's Dar Al-Arkan Real Estate Development Co. set talk.

Powerlong prices notes

In its new deal, China-based real estate company Powerlong priced an RMB 800 million issue of 9½% notes due May 27, 2016 at par to yield 9½%, a market source said.

BofA Merrill Lynch, Deutsche Bank, HSBC and RBS were the bookrunners for the Regulation S deal.

The proceeds will be used to refinance existing indebtedness.

Fantasia sells bonds

China-based Fantasia Holdings Group Co. Ltd. set talk in the 8% area for its planned issue of benchmark-sized notes due in 2018 (expected ratings: B2/B+/), a market source said.

BofA Merrill Lynch, Citigroup, HSBC and China Merchants Solutions are the bookrunners for the Regulation S issue.

The proceeds will be used to refinance existing indebtedness, finance existing and new property development projects and for general corporate purposes.

Fantasia Holdings is a property development company based in Shenzhen, Guangdong, China.

Perpetuals trade down

In other trading on Monday, the recent issue of perpetual notes that Abu Dhabi Islamic Bank priced at par moved to 105.37 bid, 105.87 offered after Friday's level of 105.62 bid, 106.12 offered.

The perpetual notes from Dubai Islamic Bank, which also priced at par, moved to 102 bid, 102.50 offered on Monday.

"Perpetuals are lower," a London-based trader said. "There's paper around."

CBD notes perform

Commercial Bank of Dubai PSC's (CBD) $500 million issue of 3 3/8% notes due in 2018 performed well in trading on Monday, a trader said.

Citigroup, HSBC and National Bank of Abu Dhabi were the bookrunners for the Regulation S deal.

The notes were trading at 100.20 bid, 100.40 offered.

And Abu Dhabi-based International Petroleum Investment Co.'s euro notes were popular, he said.

"The 2023s are 14 bps tighter on the week," he said.

Dubai bonds in focus

Dubai's DPWorld remains a solid value, the London trader said. The company's 2037s were trading on Monday with a 118 handle.

"Dubai Holding might have reached a clearing level," he said. "The 2017s are trading with a 102 handle now."

And the Dubai sovereign saw its 2043s pulling back, trading at 98 bi, 99 offered, 25 bps tighter on the month.

Ukraine notes rally

From Ukraine, notes have been rallying after a recent sell-off, said Svitlana Rusakova of Dragon Capital.

The recent issue of $500 million five-year notes that the State Administration of Railways Transport of Ukraine (Ukrzaliznytsia) priced at par to yield 9½% has moved up in trading to 100.375, she said.

Barclays, Morgan Stanley and Sberbank were the bookrunners for the Rule 144A and Regulation S deal.

Among other Ukrainian corporates, Mriya Agro Holdings and Oschadbank saw some sellers.

Yanzhou Coal on road

China's Yanzhou Coal Mining - through subsidiary Yanzhou International Trading Co. Ltd. - is on a roadshow for a benchmark-sized issue of dollar-denominated perpetual notes, a market source said.

Deutsche Bank, UBS, Barclays, Citigroup and Goldman Sachs (Asia) are the bookrunners for the Regulation S deal.

The marketing trip will be held in Hong Kong, Singapore and London.

The proceeds will be used for debt repayment, capital expenditures, working capital and general corporate purposes, according to a company filing.

The coal production, processing, marketing and transportation company is based in Zoucheng, China.

Dar Al-Arkan sets talk

Saudi Arabia's Dar Al-Arkan set initial talk in the 6¼% area for a dollar-denominated sukuk issue of benchmark-sized notes due in five years, a market source said.

Bank Alkhair, Deutsche Bank, Emirates NBD and Goldman Sachs are the bookrunners for the Regulation S issue of Islamic bonds.

The proceeds will be used to fund the company's projects.

"It's nice to see something coming, away from the banks," a London-based trader said.

The company's existing 2015 notes were trading with a 4 ¾% yield on Monday at 110 bid, 110.50 offered.

"That's 40 bps tighter on the month," he said.

Citic Pacific oversubscribed

The final book for China-based conglomerate Citic Pacific Ltd.'s $800 million perpetual notes that priced at par was $3.9 billion from 155 investors, a market source said.

The notes priced at a spread of 781.6 bps over Treasuries via HSBC and UBS.

About 95% of the orders came from Asia and 5% from Europe. Private banks picked up 55%, funds 42% and banks 3%.

KazAgro in demand

The final book for Kazakhstan-based agricultural company JSC National Managing Holding KazAgro's (KazAgro) $1 billion issue of 4 5/8% notes due 2023 that priced at par to yield 4 5/8% was $3.5 billion, a market source said.

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

The notes came to the market on Friday at a spread of 268.5 bps over Treasuries.

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