Dubai prints $1.25 billion bonds; Asian issuers busy with new deals; two-way flows noted

By Christine Van Dusen

Atlanta, Jan. 22 - Dubai's new issue of $1.25 billion notes garnered investors' attention on Tuesday, as did a slew of new issues printed or planned by emerging markets issuers from Asia.

The day saw Korea's Shinhan Bank sell $350 million 1 7/8% notes due 2018 at 99.197 to yield mid-swaps plus 127.5 basis points. China's Hengdeli Holdings Ltd. sold $350 million 6¼% notes due in 2018 at par.

This followed the Monday pricing of China SCE Property Holding Ltd.'s $150 million add-on to its 11½% notes due 2017 at 108 and China Aoyuan Property Group Ltd.'s $100 million add-on to its 13 7/8% notes due Nov. 23, 2017 at 106.668 to yield 12%.

And issuance lies ahead for China's DBA Telecommunication (Asia) Holdings Ltd., China-based Longfor Properties Co. Ltd. and China's Future Land Development Holdings Ltd.

The Markit iTraxx SovX index spread started Tuesday 1 bp wider.

"Russia and Turkey are opening flat this morning," a London-based analyst said.

Overall flows were busy, with two-way activity noted for Commercial Bank of Qatar's 2014s and 2019s.

"More interest in the Bahrain curve, which just continues to perform," a London trader said.

Some sellers were seen early in the session for Abu Dhabi Islamic Bank's recent perpetual notes. But buyers emerged later in the day, moving the notes up to 106.35.

"Dubai was generally a mixed bag," the London trader said, noting demand for DPWorld's 2017s and 2037s. "International Petroleum Investment Co., Qatar and Abu Dhabi National Energy Co. were all a bit subdued."

Qatar-based Qtel International's 2023s saw buyers and sellers, and demand continued for Kuwait-based Kipco and Burgan Bank.

Dubai sells notes

In its new deal, Dubai priced a two-tranche issue of $1.25 billion notes due in 10 and 30 years in a Regulation S deal, a market source said.

The first tranche, $750 million 3 7/8% Islamic bonds, priced at par to yield 3 7/8%. The bookrunners were Dubai Islamic Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank.

The second tranche, $500 million 5¼% conventional notes, priced at 98.148 to yield 5 3/8%.

Emirates NDB Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank managed the transaction.

"Any doubts as to the ability of this credit to successfully, and relatively easily, tap the markets were cast aside in swift fashion," the London trader said. "Huge order books."

Dubai notes trade up

In the gray market, the new 2023s from Dubai closed up 50 cents to 75 cents, while the 2043s ended the day up 1 point to 2 points.

Meanwhile the sovereign's existing 2022 dollar notes opened at 119.12 bid, 119.37 offered and closed up at 1201/4.

"Dubai's 2021s still feel very well supported and saw demand form 113 up to 113½ as the day went on," the London trader said. "Very impressive. Expecting a fairly busy start tomorrow with bond Dubai bonds, I would assume, free to trade early."

African bonds quiet

From Africa, sovereign bonds were mostly quiet on Tuesday, a trader said, though Morocco's 2042s traded at 105 on the back of the Dubai news.

"The South Africa sovereign continues to push lower, about 15 to 20 bps wider on the month," he said.

Meanwhile, bonds from Egypt were mostly unchanged.

"We're seeing Angola at 114 mid and holding well," he said. "Zambia, having traded at sub-100 in December, is trading with a 103 handle now."

Hengdeli does deal

China-based watch retailer and wholesaler Hengdeli sold $350 million 6¼% notes due in 2018 at par to yield 6¼%, a market source said.

The notes were talked at a yield in the 6 3/8% area.

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

New notes from Shinhan

Korean lender Shinhan Bank sold $350 million 1 7/8% notes due July 30, 2018 at 99.197 to yield mid-swaps plus 127.5 bps.

The notes were talked at a spread in the Treasuries plus 130 bps area.

ANZ, Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank, HSBC, JPMorgan and Mizuho Securities were the bookrunners for the Rule 144A and Regulation S deal.

And Peru-based bank BBVA Banco Continental sold $300 million 3¼% notes due July 29, 2016 at 99.786 to yield 2.314%, a market source said.

Bank of America Merrill Lynch, BBVA and Citigroup were the bookrunners for the Rule 144A and Regulation S deal.

QNB, Central China price bonds

These new deals followed the Monday pricing of several issues from Asia and the Middle East.

Among the issuers was Qatar National Bank SAQ, which sold a CHF 300 million issue of notes due Jan. 12, 2015 at par to yield Libor plus 40 bps.

UBS and QNB Capital were the bookrunners for the Regulation S deal.

And Hong Kong's Central China Real Estate Ltd. priced a $200 million issue of 8% notes due Jan. 28, 2020 at par to yield 8%, according to a company filing.

HSBC, JPMorgan, Morgan Stanley and UBS were the bookrunners for the Regulation S deal.

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

SCE prints notes

In another Monday deal from Asia, China SCE Property priced a $150 million add-on to its 11½% notes due Nov. 14, 2017 at 108, according to a company filing.

Deutsche Bank, HSBC and ICBC International Securities Ltd. were the bookrunners for the Regulation S notes, which are non-callable for three years.

The original $200 million issue priced in November at par to yield 11½%.

Proceeds will be used to finance new and existing projects and for general corporate purposes.

Aoyuan issues bonds

Monday also saw China Aoyuan Property Group price a $100 million add-on to its existing 13 7/8% notes due Nov. 23, 2017 at 106.668 to yield 12%, a market source said.

Bank of America Merrill Lynch, Citigroup and UBS were the bookrunners for the Regulation S-only transaction.

The original $125 million of 13 7/8% notes due 2017 priced in November at 97.83 to yield 14½%.

Proceeds will be used primarily to fund existing and new property projects and land acquisition, and also to refinance existing debt and for general corporate purposes.

The final book was about $200 million from 40 accounts, with 79% of the orders from Asia and 21% from Europe.

Asset and fund managers picked up 35% and private banks 65%.

DBA Telecom sets talk

In other deal-related news from Asia, China's DBA Telecommunication, which owns and operates smart payment terminals, set initial price talk in the 12% area for a dollar-denominated issue of five-year notes.

BNP Paribas, Hong Kong Branch and Deutsche Bank AG, Singapore Branch are the joint managers for the Regulation S offering.

Proceeds will be used to expand the company's intelligent self-services business and for working capital and general corporate purposes.

Longfor gives guidance

China-based Longfor set price talk in the 7% area for a dollar-denominated issue of benchmark-sized notes due in 10 years.

Citigroup, HSBC, Morgan Stanley and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The proceeds will be used for refinancing and for general corporate purposes.

And Hong Kong's Future Land is planning a dollar-denominated issue of notes via Bank of America Merrill Lynch, Deutsche Bank, UBS and Haitong International in a Regulation S deal.

The proceeds will be used to repay loans, fund land acquisitions and for general corporate purposes.

Petron plans roadshow

Also on Tuesday, Philippines-based oil refining and marketing company Petron Corp. mandated Deutsche Bank, HSBC, Standard Chartered Bank and UBS for a roadshow to market a dollar-denominated issue of notes, a market source said.

The marketing trip for the Regulation S deal will begin on Wednesday and conclude on Jan. 29.

And Colombia is planning to issue dollar-denominated global bonds by the end of the month, according to a filing with the Securities and Exchange Commission.

Deutsche Bank Securities and Goldman Sachs are the bookrunners for the SEC-registered deal.

The notes will be due in the month of March. The year is to be determined.

The proceeds will be used for general budgetary purposes.

Davivienda sets tenor

In another planned deal from Colombia, lender Banco Davivienda SA set the tenor at five years for its $300 million issue of notes via Credit Suisse and JPMorgan, a market source said.

Credit Suisse and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

And Malaysia-based conglomerate Sime Darby Berhad Bhd. set price talk for its two-tranche issue of dollar notes due in five and 10 years.

The dollar benchmark notes due in five years were talked at the Treasuries plus 135 bps area.

The 10-year dollar benchmark notes were talked at the Treasuries plus 150 bps area.

Citigroup, HSBC Amanah Malaysia, Maybank Investment Bank and Standard Chartered Bank are the bookrunners for the Regulation S deal.

Proceeds will be used to finance capital expenditures, working capital requirements and general corporate purposes.

Hungary, Sberbank tap leads

Hungary will market a possible issue of notes during a roadshow from Jan. 28 to Feb. 5, a market source said.

The marketing trip will begin in Los Angeles and travel to San Francisco, Boston, New York and Munich before concluding in London.

BNP Paribas, Citigroup, Deutsche Bank and Goldman Sachs are arranging the roadshow.

Russian lender Sberbank has mandated Barclays and Sberbank CIB for a roadshow to market a ruble-denominated issue of Regulation S notes in London starting Thursday, a market source said.

And Russian Railways is planning a roadshow for its upcoming issue of bonds.

The proceeds will be used for infrastructure projects.

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