Investors still focused on Saudi Arabia as primary hosts Delhi airport, Vakifbank, Polyus Gold

By Christine Van Dusen

Atlanta, Oct. 20 – India’s Delhi International Airport Pvt Ltd., Turkey’s Turkiye Vakiflar Bankasi TAO (Vakifbank) and Russia-focused Polyus Gold International Ltd. sold notes on Thursday amid fast-paced trading of the new mega-deal from Saudi Arabia.

Meanwhile, the larger markets took a beating after a drop in oil prices and the European Central Bank’s decision to keep rates unchanged. And from the United States came a report that existing home sales rose 3.2% in September and weekly jobless claims climbed again.

But emerging markets investors were mostly focused on Saudi Arabia’s giant new transaction, a $17.5 billion issue of notes in three tranches due 2021, 2026 and 2046 that priced Wednesday via Citigroup, HSBC, JPMorgan, Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, MUFG Securities, Morgan Stanley and NCB Capital in a Rule 144A and Regulation S deal.

The $5.5 billion 2 3/8% notes due in 2021 that priced at 99.007 to yield 2.588%, or Treasuries plus 135 basis points, traded on Thursday morning at 99.57 bid, 99.67 offered. Later in the morning they moved to 99.65 bid, 99.70 offered.

The $5.5 billion 3¼% notes due in 2026 that priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, traded in the morning at 99.43 bid, 99.58 offered. A few hours later they were spotted at 99.64 bid, 99.69 offered.

And the $6.5 billion 4½% notes due in 2046 that priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, were quoted at 99.70 bid, 99.05 offered early in the morning. They quickly moved to 99.87 bid, par offered.

Rapid trading for Saudi Arabia

The proceeds from Saudi Arabia’s deal will be used for general domestic budgetary purposes.

“Super-fast market,” a trader said. “Whoever said EM isn’t liquid needs to check the bid-offer on the new Saudi Arabia. It’s been high-volume, two-way flow since the 8 a.m. free-to-trade. After that initial pull-back on the 30-year, it’s now cracking on back toward the early levels.”

In other trading, bonds from Turkey were firm on Thursday morning, another trader said.

“But all the attention is on the $17.5 billion of Saudi Arabia,” he said.

By the end of the session, the sovereign’s notes were stronger, tightening about 2 bps to 3 bps, another trader said.

Delhi airport prices bonds

In its new deal, India’s Delhi International Airport priced $522.6 million 6 1/8% notes due Oct. 31, 2026 at par to yield 6 1/8%, according to an informed source.

The notes were talked in the 6¼% area.

Citigroup, Standard Chartered Bank, Axis Bank, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan and MUFJ Securities were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for refinancing purposes.

Vakifbank prints notes

In its new deal, Turkey’s Vakifbank priced $500 million 5½% notes due Oct. 25, 2021 at 99.509, according to a company announcement and a market source.

Societe Generale was the bookrunner for the Rule 144A and Regulation S deal.

Other details were not immediately available on Thursday.

Vakifbank is a lender based in Istanbul.

Issuance from Polyus Gold

In another new deal, Polyus Gold sold $500 million 4.699% notes due March 28, 2022, according to a company announcement

JPMorgan, Renaissance Capital, Sberbank and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

Other details were not immediately available on Thursday.

London-based Polyus is a gold producer with mines in Russia and Kazakhstan.

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