Primary market sees deals from Turkey, Israel, Midas; Ukraine bonds widen amid clashes

By Christine Van Dusen

Atlanta, Jan. 22 - Turkey, Israel and Singapore's Midas Holdings Ltd. were among the issuers to sell notes on Wednesday as Ukraine bonds remained relatively stable in the face of violent clashes between protestors and police in Kiev.

"Ukraine has been relatively volatile on the back of news that a protestor was killed overnight," a trader said. "Ukraine five-year cash is circa 40 basis points wider this morning."

Among corporates in Ukraine, sellers have outnumbered buyers, said Svitlana Rusakova of Dragon Capital.

She has seen bids so far this week for the State Export-Import Bank of Ukraine's (Ukreximbank) 2016s and 2018s.

Looking at Africa, a few buyers were seen for Angola late in the day and trading was solid for Morocco, a trader said.

"The Nigeria sovereign is holding," he said. "Zambia went through at 851/2."

He also noted some demand for Eskom Holdings' 2021s near 1001/4.

"They have had a good month, moving 25 bps tighter," he said. "And there's no stopping Egypt, with the 2020s now at 99¼ bid, 99¾ offered and the 2040s at 89 bid, 89½ offered."

The 2020s are 100 bps tighter on the month. The 2040s have tightened 66 bps.

One trader was keeping an eye on the existing bonds from Kuwait's Kipco, which set out on Wednesday for a roadshow to market notes.

"Let's see where the talk and tenor are, but obviously a five-year probably places it a little too close to the existing 2020s," he said. "Kipco's new issue will be a good barometer of market sentiment. If the first three weeks are anything to go by, this one should go well."

'Solid bid' for Gulf paper

In other trading from the Middle East, Aldar Properties PJSC's 2018s were trading between 102 and 102.10 on Wednesday.

"The yield looks OK on this one and the 2014s are paid in May," he said.

Overall there has been a solid bid for paper and a lack of issuance from the region he said.

"Solid tone," he said. "Financials very well bid."

Russian issuance could taper

Issuance from regions of Russia could slow down this year, given that the majority of Russian regions will not be allowed to borrow from the international capital market, according to a report from Commerzbank.

The only borrowers that will be permitted to tap the international markets will be "those that can prove budget stability and a rating at least equal to Russia's sovereign rating," the report said. "The city of Moscow is currently the only that meets the criteria."

The regions will "increasingly rely on ruble bond market financing," the report said.

Turkey sovereign, banks busy

Taking a closer look at Turkey, there was activity on Wednesday for Turkey's 2023s and Turkiye Garanti Bankasi AS (GarantiBank), the analyst said.

Also busy was Turkiye Is Bankasi AS' (Isbank) issue of 2022s, following Tuesday's news that the lender is looking to issue as much as $5 billion of bonds.

"Outside Turkey, Romania's long-end has seen demand recently," she said.

From the Middle East, Dubai Electricity and Water Authority (DEWA) saw its 2020s "doing a lot of work" between 117 1/8 and 117 3/8, another trader said.

"Tighter by 3 bps," he said.

Turkey prices bonds

In its new deal, Turkey sold $2.5 billion 5¾% notes due 2024 at 99.251 to yield 5.85%, a syndicate source said.

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

Citigroup, HSBC and Morgan Stanley were the bookrunners for the Securities and Exchange Commission-registered deal.

Israel sells notes

Israel priced a €1.5 billion issue of 2 7/8% notes due 2024 at 99.512 to yield 2.932%, or mid-swaps plus 90 bps, a market source said.

The notes were talked at a spread in the mid-swaps plus 95 bps area.

Barclays, Citigroup and Goldman Sachs were the bookrunners for the Regulation S deal.

Midas prints notes

Singapore-based manufacturer Midas sold an upsized S$85 million 5¾% notes due 2017 at par to yield 5¾%, according to a company announcement.

The notes were talked at a yield in the high-5% area.

DBS Bank and HSBC were the bookrunners for the deal. ICBC Singapore was the co-manager.

The company set out in October for a roadshow to market its S$500 million multicurrency medium-term note program with the two banks.

The proceeds from the program will be used for general corporate purposes, including refinancing existing borrowings and financing acquisitions, investments and working capital and capital expenditure requirements.

Chinese corporate sets talk

China Universal International Leasing - through issuer Universal Number One. Co. - set talk in the 5.8% area for its upcoming RMB 1 billion issue of three-year notes, a market source said.

Bank of Communications and BNP Paribas are the bookrunners for the Regulation S deal.

China General Technology (Group) Holding Co. is the keepwell deed provider.

Guidance from Famsa

Mexico's Grupo Famsa SAB de CV revised guidance for its upcoming $50 million issue of notes due in one year, a market source said.

The Regulation S notes are being talked at 6¼% to 6½%.

Espirito Santo Investment Bank is the bookrunner for the unrated deal, which is expected to price on Wednesday.

Grupo Famsa is a retail company based in Monterrey, Mexico.

Eesti Energia mandates banks

Estonia's Eesti Energia AS has mandated Deutsche Bank and Nordea Markets as bookrunners for a possible tap of its 4¼% euro-denominated notes due 2018, a market source said.

An investor update call took place on Wednesday.

The issuer is a utility based in Tallinn.

Gazprom, Indonesia plan notes

Russia's OJSC Gazprom is expected to issue eurobonds in February, a market source said.

Gazprom is a Moscow-based natural gas producer.

Indonesia is looking to print an issue of Islamic bonds during the second half of this year, a market source said.

No other details were immediately available on Wednesday.

Powerlong postpones issuance

China's Powerlong Real Estate Holdings Ltd. has postponed its planned international offering of fixed-rate senior notes, a market source said.

The real estate company had mandated Deutsche Bank, HSBC, RBS and UBS as the joint lead managers and joint bookrunners for the Regulation S offering.

The notes were talked at 9 7/8%.

The proceeds were to be used to refinance existing debt and for general working capital purposes.

The real estate company is based in Hong Kong.

Colombia does deal

On Tuesday, Colombia priced $2 billion 5 5/8% notes due 2044 (Baa3/BBB/BBB) at 99.677 to yield 5.647%, or Treasuries plus 190 bps, a market source said.

BofA Merrill Lynch and Credit Suisse were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general budgetary purposes.

The final book was about $4.2 billion.

Towngas deal oversubscribed

The final book for Hong Kong and China Gas Co.'s (Towngas) $300 million 4¾% perpetual notes was $1.8 billion from 102 accounts, a market source said.

The notes priced at par to yield 4¾% via HSBC, JPMorgan and Morgan Stanley in a Regulation S deal.

About 80% of the orders came from Asia and 20% from Europe, with 54% from fund managers, 15% from central banks and sovereign wealth funds, 15% from private banks, 8% from banks, 6% from insurers and 2% from others.

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