Asian issuers line up deals; Egypt plans sukuk; National Bank of Kuwait gives guidance

By Christine Van Dusen

Atlanta, March 31 – Korea Hydro & Nuclear Power Co. and Hong Kong mandated bookrunners while Egypt pondered issuance on a Tuesday that ended the month on a “fairly active” note, a London-based trader said.

“Overall market had a good tone,” he said. “Perpetuals were calmer ahead of supply from National Bank of Kuwait.”

The issuer on Tuesday set talk in the high-5% area for its dollar-denominated issue of benchmark-sized and perpetual notes via HSBC, Standard Chartered Bank, Citigroup, National Bank of Abu Dhabi and NBK Capital in a Regulation S deal.

“The name is a very solid and very well-regarded one, regionally,” he said. “However, a 25% private bank rebate may see some loose bonds around on the break. Let’s see what size they issue, too.”

Long-dated bonds remained popular, with Saudi Electricity Co.’s 2044s trading above 109 and closing almost 5 basis points tighter, he said.

“Sighted solid bids on Bahrain’s 2044s and Dubai’s 2043s,” he said

From Latin America, Brazil-based Pacific Rubiales Energy Corp. was once again in the news, this time amid rumors that the company is hiring banks to lead bond meetings, a New York-based trader said.

The company recently reported disappointing earnings and suspended dividends and saw its bonds plummet after a contract change with Ecopetrol SA, which meant other operators would likely run Rubiales Field.

On Tuesday, though, the bonds were “very quiet” at the start of the session, a London-based trader said. “Down 25 cents to 50 cents.”

By the afternoon in New York, activity picked up a little bit, and the bonds were “feeling a little stronger from the morning lows,” he said.

Petrobras tightens

Meanwhile, Brazil-based Petroleo Brasileiro SA saw its spreads move tighter into the close, finishing up narrower by 20 bps in the belly of the curve, the New York trader said.

The company on Monday announced that it had sold its rights to the Austral Basin in Argentina as part of an effort to make divestitures and reduce its debt.

The tone for Latin American corporate bonds was firm, overall, and flows were even, the trader said.

Brazil-based Odebrecht SA moved higher, almost 7 points on the week now, while high-grade bonds from Chile were mostly unchanged, he said. Mexico and Colombia also pushed higher, as did Cemex SAB de CV.

Frasers talks bonds

Singapore-based Frasers Centrepoint Ltd. set talk in the 3% area for a four-year issue of Singapore dollar-denominated bonds, a market source said.

DBS Bank is the bookrunner for the Regulation S deal.

Frasers Centrepoint, a subsidiary of Frasers and Neave, Ltd., is a residential property developer and retail mall owner and operator in Singapore.

Korea Hydro taps bookrunners

Korea Hydro & Nuclear Power has mandated BNP Paribas, Citigroup, Goldman Sachs and HSBC as bookrunners for a roadshow beginning April 7, a market source said.

An issue of notes may follow.

Korea Hydro is a Seoul, South Korea-based subsidiary of Korea Electric Power Corp. (Kepco).

Hong Kong, Egypt seek issuance

Hong Kong has mandated HSBC, Standard Chartered Bank, CIMB and National Bank of Abu Dhabi as bookrunners for an issue of Islamic bonds, a market source said.

Egypt is looking to issue dollar-denominated Islamic bonds, a market source said.

Other details were not immediately available.

Poland deal draws orders

Poland’s new issue of €1 billion 7/8% notes due May 10, 2027 that priced Monday at 98.336 to yield 1.022%, or mid-swaps plus 35 bps, drew more than €1.8 billion in orders, a market source said.

Barclays, Citigroup, Santander and Societe Generale were the bookrunners for the Regulation S deal.

Investors from Germany picked up 21%, Asia 18%, Poland 14%, France 11%, the United Kingdom 8%, Italy 6%, other Europe 6%, Scandinavia 5%, Austria 4%, Switzerland 4% and the Middle East 3%.

Fund managers accounted for 44%, central banks and sovereign wealth funds 22%, insurers and pension funds 21% and banks and private banks 13%.

Hong Kong Telecom sees orders

The final book for Hong Kong Telecommunications Ltd.’s new issue of $500 million 3 5/8% notes due Feb. 15, 2025 was about $4.1 billion from more than 270 accounts, a market source said.

The notes priced on Monday at 98.991 to yield Treasuries plus 178 bps via BofA Merrill Lynch, HSBC, Mizuho Securities, ANZ, Deutsche Bank, Morgan Stanley and Standard Chartered Bank in a Regulation S deal.

About 79% of the orders came from Asia and 21% from Europe, with 77% from fund managers, sovereigns and central banks, 8% from insurers, 8% from private banks and 7% from banks.

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