Primary hosts Turkey, Pakistan, Oil India, Gulf Keystone; Turkish, Russian bonds shine

By Christine Van Dusen

Atlanta, April 8 - Turkey, Pakistan, Oil India Ltd., Iraq-focused Gulf Keystone Petroleum Ltd. and Banco Santander Chile sold notes on Tuesday as investors showed a strong preference for Turkish corporate bonds and sovereign and bank paper from Russia.

Taking a closer look at the new bond issue from Turkey, the sovereign priced €1 billion 4 1/8% notes due 2023 at 99.447 to yield 4.2%, or mid-swaps plus 281.5 basis points, according to a filing with the Securities and Exchange Commission.

The notes - via Deutsche Bank, ING and JPMorgan - were initially talked at a yield in the 4 3/8% area.

"It does not offer much discount to the existing curve," a London-based analyst said.

Meanwhile, in trading, high-yield Russian corporates like Evraz Group SA and Far Eastern Shipping Co. plc (Fesco) were better bid, a trader said.

"Russia is opening a little firmer generally this morning, circa 4 bps tighter in sovereign paper," she said.

From Latin America, most bonds were mixed, a New York-based trader said, as cash prices tried to keep up with the rally in U.S. Treasuries.

Spreads are at or near recent tights, which makes this a good time for issuing on the long end, he said.

Bonds from Argentina continued to lag while flows and volumes were balanced, he said.

Notes from issuers in Central and emerging Europe have not received much attention so far this week, a trader said.

"They were generally ignored," she said. "Investors are focusing on the new deals."

Zambia performs

The trader pointed to the new issue of notes from Zambia, a $1 billion issue of 8½% notes due in 2024 that came to the market late-Monday at 99.174 to yield 8 5/8%.

The Rule 144A and Regulation S notes - via Barclays and Deutsche Bank - were initially talked at 8¾% to 8 7/8%.

The proceeds will be used for general corporate purposes.

"The new Zambia deal is performing particularly well, up 2 points since reoffer," she said.

Ukraine bonds drift lower

Bonds from Ukraine have so far this week have drifted lower on limited trading, said Svitlana Rusakova of Dragon Capital.

"Corporates and quasi-sovereigns were marked about 2 points lower, with mostly sellers but a few pockets of demand in quasi-sovereign banks," she said.

Pakistan prints notes

Pakistan priced a two-part $2 billion issue of notes due 2019 and 2024, a market source said.

The $1 billion 7¼% notes due in 2019 priced at par to yield 7¼%, following talk in the mid-7% area.

The $1 billion 8¼% notes due 2024 priced at par to yield 8¼% after talk in the mid-8% area.

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

Issuance from Oil India

In its new deal, Oil India priced a two-tranche issue of $1 billion notes due 2019 and 2024, a market source said.

The deal included $500 million 3 7/8% notes due 2019 that priced at 99.847 to yield 3.909%, or Treasuries plus 222.5 bps.

The second tranche consisted of $500 million 5 3/8% notes due 2024 that priced at 99.527 to yield 5.437%, or Treasuries plus 272.5 bps.

Citigroup, Deutsche Bank, HSBC, RBS and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Gulf Keystone does deal

Also on Tuesday, Iraq-focused Gulf Keystone Petroleum priced a $250 million issue of 13% notes due 2017 at par to yield 13%, a market source said.

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

London-based Gulf Keystone is an independent oil and gas exploration, development and production company focused on exploration in the Kurdistan Region of Iraq.

Santander Chile sells bonds

Banco Santander Chile priced $500 million floating-rate notes due 2017 at par to yield Libor plus 90 bps, a market source said.

The notes priced at the tight end of talk, set at Libor plus 90 bps to 95 bps.

BofA Merrill Lynch, Deutsche Bank, Goldman Sachs, Santander and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Primary sees Abengoa

Peru's Abengoa Transmision Sur SA sold $432 million 6 7/8% notes due 2043 at 99.995 to yield 6 7/8%, a market source said.

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

The proceeds will be used to refinance existing bank debt.

Abengoa Transmision, an engineering construction and service company based in Lima, is a subsidiary of Spanish conglomerate Abengoa Finance SAU.

Gerdau on roadshow

In other news, Brazil-based steel producer Gerdau SA was on a roadshow on Tuesday for a dollar-denominated issue of 30-year notes, a market source said.

BofA Merrill Lynch, Itau, JPMorgan and Banco Santander are the bookrunners for the deal.

And Ecuador is looking to issue up to $700 million of notes, a market source said.

The proceeds will be used for infrastructure projects.

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