Korea Land prints tap; Baghlan Group sets tenor; TAQA seeks bookrunners; Dubai bonds eyed

By Christine Van Dusen

Atlanta, Dec. 9 - Korea Land & Housing Corp. sold bonds on Monday while Dubai's Baghlan Group prepared to issue notes and Abu Dhabi National Energy Co. (TAQA) sought bookrunners during a busy trading session for emerging markets assets.

"Busy start to what is I would suggest is the last active trading week of the year," a London-based trader said.

He noted solid interest in notes from Dubai and its corporates, including Dubai Holding and Dubai Electricity and Water Authority.

"It felt like there was more confidence growing, regarding Dubai Holding," he said. "They announced previously that they had the cash to pay down the 2014 euro notes, due in late January, and this would leave the 2017 sterling notes as the only way to play this name."

The company's bonds closed about 25 bps better on the day, he said.

"Kuwaiti names still seem popular," he said. "Perpetuals have ticked higher."

Two-way activity was seen for the perpetuals from Dubai Islamic Bank while mostly sellers emerged for Emirates Islamic Bank, he said.

"The Abu Dhabi and Qatar space is treading water," he said. "They remain defensive and low-beta, although it's worth noting that the long end of Qatar has a sneaky bid and Aldar Properties' 2018s were going through at 100.50 a few times today after a textbook squeeze."

Meanwhile, bonds from Turkish corporates saw buyers on Monday, a London-based analyst said.

There was "an overall stronger feel to our market this morning," she said, adding there were "no new issues or mandates this morning in Central and emerging Europe, the Middle East or Asia, with the year coming to a close."

Said the London trader, "It now seems unlikely for much more in the way of supply. Liquidity again is a little testing on smaller and illiquid names, but that's to be expected."

Turkish banks, Baghlan on tap

Still, the analyst does expect that some banks from Turkey could issue notes in the coming weeks.

And Dubai's Baghlan Group took a step toward the market, setting the tenor at five years and the size at a maximum of $300 million for its upcoming issue of notes with BNP Paribas in a Regulation S deal.

The notes are expected to price by the end of the day on Thursday.

"Although it is a great way to diversify into a more frontier market with strong upside dynamics, the structure is complex and might require a substantial premium to accommodate the risks," she said. "There is a substantial amount of secured debt at the moment - more than 80% of total debt - which, if repaid with the potential new issue, will be reduced to $50 million only. As such, in our view, if the issue is placed it will be very tightly held and not very liquid."

GEMS trades up

The recent issue of 12% perpetual notes that the United Arab Emirates' GEMS MEA Sukuk Ltd. priced at par was up about a point on Monday, a trader said.

Abu Dhabi Islamic Bank, Credit Suisse and Morgan Stanley were the bookrunners for the Regulation S deal.

The issuer is a subsidiary of Global Education Management Systems Ltd., based in the UAE.

Ukraine still under pressure

Bonds from Ukraine entered the week under pressure as anti-government protests continued, a trader said.

"Ukraine bonds are down a half-point in general this morning," she said.

The president's trips to China and Russia "did not bring clear results," said Svitlana Rusakova of Dragon Capital.

"Corporates remained decently bid," she said. "Strong demonstrations over the weekend in Kiev keep the uncertainty very high, though persisting rumors about a Russia support deal may lead to some speculative bids."

Korea Land does deal

In its new issue, Korea Land & Housing priced a CHF 100 million add-on to its floating-rate notes due Dec. 18, 2015 at par to yield Libor plus 65 bps, a market source said.

Deutsche Bank, HSBC, RBS Securities and UBS were the bookrunners for the deal.

The original CHF 400 million issue of 2015 notes that priced in November also priced at par to yield Libor plus 65 bps.

The Seongnam, South Korea-based company engages in the construction and management of land and housing properties.

And Abu Dhabi's TAQA is seeking bookrunners for a possible offering of notes.

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