Deals from Islamic Development, Banco Safra, Ping An, Banco de Chile; Ukraine under pressure

By Christine Van Dusen

Atlanta, Feb. 27 - Islamic Development Bank, Brazil's Banco Safra SA, Ping An Insurance Group Co. of China and Banco de Chile SA sold notes on Thursday as turmoil continued in Ukraine.

"There are reports from Ukraine this morning that armed men have stormed the Crimean Parliament Building calling for unification with Russia, indicative of the challenges the country faces in uniting the population under a new government," a London-based analyst said. "At the same time, Russia has put its armed forces on alert, adding further tension to the crisis."

In response, Ukraine bonds were down about half a point on Thursday morning, she said.

"Turkey is also under pressure this morning on further allegations against Prime Minister Erdogan," she said. "Both Russia and Turkey sovereign bonds are seeing sellers this morning - the 10-year Turkey is 3 basis points wider - with investors more attracted to the perceived safety of Central and emerging European sovereign paper."

Buyers emerged Thursday for bonds from Poland, Romania, Hungary and Croatia.

"Middle East bonds continue to perform well," she said. "Abu Dhabi Commercial Bank and Kuwait Projects Co. are both in demand."

Dubai-based Dolphin Energy's 2019 dollar bonds were spotted Thursday at 112, a London-based trader said.

"Very defensive credit," he said. "A little paper around on Dubai Electricity and Water Authority's 2015s."

But overall, activity on Thursday was limited for bonds from the Gulf region as local investors prepared to leave the office for a long weekend, he said.

"Steady morning before a quieter afternoon," a trader said.

GEMS sees demand

Some demand was noted on Thursday for GEMS MEA Sukuk Ltd.'s 12% perpetual notes, which priced at par, a trader said.

"Better buyers for Abu Dhabi Islamic Bank and Dubai Islamic Bank perpetuals have been sighted as well," he said. "Saudi Electricity Co. is holding solid, tighter by 10 bps to 15 bps on the month. We've seen two-way activity for Dubai Islamic Bank's 2017s. They're 40 bps tighter on the month now."

Burgan, Emaar realize gains

Bonds like Kuwait-based Burgan Bank's 2020s, Abu Dhabi Commercial Bank's 2023s and Emaar Properties' 2019s have seen gains of between 65 bps and 75 bps over the month, he said.

"Emaar's was on the back of the upgrades, ADCB has some solid supporters and was looking cheap, and Burgan was being dragged higher and tighter by demand for Kipco 2019s," he said.

Looking to Abu Dhabi's Aldar Properties PJSC, the company's 2018s printed at 102½ on Thursday, he said.

"I still think it looks like a good value within the Abu Dhabi complex," he said.

Africa in focus

Trading of bonds from Africa was steady on Thursday, though the notes did not get as much of a lift as was seen on Wednesday, a London-based trader said.

"Angola goes out at 107½ bid and has support again," he said. "In South Africa, there's further demand for corporates."

Eskom Holdings' 2021 and 2023 bonds were among the most popular, he said.

Issuance from IDB

In its new deal, Islamic Development Bank sold $1.5 billion 1.8125% Islamic bonds due 2019 at par to yield 1.812%, or mid-swaps plus 23 bps, a market source said.

The notes were talked at a spread in the mid-to-high 20 bps area.

CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S sukuk.

"It's their biggest issue to date," a trader said.

Banco Safra sells notes

Brazil-based lender Banco Safra sold CHF 350 million 1.85% notes due 2017 at par to yield 1.85%, or mid-swaps plus 167.6 bps, a market source said.

UBS Investment Bank was the sole bookrunner for the Regulation S deal. Banco Safra and Commerzbank were co-managers.

Banco Safra is a lender based in Sao Paulo.

Ping An prices bonds

China's Ping An Insurance Group printed an S$370 million issue of 4 1/8% notes due 2019 at par to yield 4 1/8%, a market source said.

HSBC and Standard Chartered Bank were the active bookrunners for the Regulation S deal. Morgan Stanley was the passive bookrunner.

Banco de Chile does deal

Banco de Chile priced a CHF 275 million issue of notes due 2016 and 2019 (Aa3) with bookrunners BNP Paribas and Deutsche Bank, a market source said.

The deal included CHF 150 million floating-rate notes due in 2016 that priced at par to yield Libor plus 75 bps.

The second tranche of CHF 125 million 1¼% notes due 2019 priced at 100.451 to yield 1.255%, or mid-swaps plus 80 bps.

Banco de Chile is based in Santiago.

Russian Railways sets talk

Russian Railways Co. set initial price talk in the mid-swaps plus 300-bps area for its upcoming issue of euro-denominated and benchmark-sized notes due in nine years (Baa1/BBB/BBB), a market source said.

Barclays, Citigroup, JPMorgan and VTB Capital are the bookrunners for the Regulation S deal.

The notes are expected to price on Thursday.

Russian Railways is a rail operator based in Moscow.

Russian bank sets roadshow

Russia's Promsvyazbank will set out on March 3 for a roadshow to market a dollar-denominated issue of notes, a market source said.

No other details were immediately available on Thursday.

Promsvyazbank is a lender based in Moscow.

BOC deal oversubscribed

The final book for Bank of China Ltd.'s new RMB 3 billion two-tranche issue of notes due 2016 and 2019 was a combined RMB 9 billion, a market source said.

The RMB 2 billion 3.3% notes due in 2016 priced at par and drew RMB 6 billion from about 100 accounts, with 59% from Singapore, 34% from Hong Kong and 7% from others.

Banks picked up 63%, fund managers 24%, private banks and others 11% and insurers 2%.

The RMB 1 billion 4% notes due in 2019 priced at par and drew RMB 3 billion in orders from about 50 accounts, with 39% from Taiwan, 36% from Singapore, 17% from Europe and 8% from Hong Kong.

Banks accounted for 61%, insurers 19%, fund managers 14% and private banks and others 6%.

Bank of China, DBS Bank, OCBC Bank and Standard Chartered Bank were the bookrunners for the Regulation S deal. Agricultural Bank of China was the co-manager.

The proceeds will be used for general corporate purposes.

Singapore school issues notes

On Wednesday, Singapore Management University priced S$100 million 3.155% notes due 2024 (expected rating: Aaa) at par to yield 3.155%, a market source said.

DBS and HSBC were the bookrunners for the Regulation S deal.

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