Korea Eximbank, Serbia, China Taiping, Icici sell notes on mixed day; IPIC deal on deck

By Christine Van Dusen

Atlanta, Nov. 14 - Export-Import Bank of Korea (Korea Eximbank), the Republic of Serbia, China Taiping Capital Ltd. and India's Icici Bank Ltd. sold notes on a Wednesday that started off solid but weakened on concerns about the economic situation in Greece and the impending fiscal cliff in the United States, as well as the Israeli strike on Gaza.

"We have seen a slightly better tone this morning," a London-based analyst said. "We have seen further tightening at the open."

Optimism got an early boost from the previous day's news that Germany could put together a bailout payment of €44 billion for Greece. But some positivity wore off as the day went on, with investors remaining concerned about the global economic picture.

The Israeli strike in Gaza also "caused a little ripple in the market," a trader said.

"Resurgent European risks have added to market concerns about the US fiscal cliff, weighing on market sentiment," Barclays said in a report. "We are cautious about risky assets generally for the rest of the fourth quarter but remain constructive on resolutions being found beyond year-end."

Trading volumes were moderate on Wednesday, a London-based trader said.

"Did see some small weakness this afternoon after a very solid morning. However, this felt more as though bids backed off and liquidity had dried up as many locals had left for the day," he said. "Ultimately, I still think Dubai trades well and is a buy on any real dip. I think Abu Dhabi names are in a holding pattern given supply from two liquid names."

Overall, spreads narrowed, with the Markit iTraxx Sovx index spread 4 basis points tighter and the corporate index about 5 bps tighter.

And several issuers took the opportunity to advance new deals, including the Republic of Indonesia, Russia's OAO Novatek, Abu Dhabi's International Petroleum Investment Co. (IPIC) and South Africa's FirstRand Bank Ltd.

Korea Eximbank prices notes

In its new deal, Korea Eximbank sold $1 billion 1¼% notes due Nov. 20, 2015 at 99.824 to yield Treasuries plus 100 bps, in line with talk.

Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and UBS were the bookrunners for the Securities and Exchange Commission-registered deal.

Proceeds will be used for general operations, including extending foreign currency loans and repaying maturing debt and other obligations, according to a company filing with the SEC.

And Serbia priced $750 million 5¼% notes due Nov. 21, 2017 at 99.135 to yield 5.45%, or Treasuries plus 482.5 bps, after being talked in the 5 5/8% area.

Deutsche Bank, HSBC and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

China Taiping prints bonds

In another new deal, China Taiping Capital priced a $300 million issue of 4 1/8% notes due Nov. 21, 2022 at 99.272 to yield 4.215%, or Treasuries plus 260 bps.

The price matched talk of Treasuries plus 260 bps.

The proceeds will be used for general corporate purposes, including repaying notes due 2013.

BOCI Asia Ltd., Citigroup Global Markets Ltd. and JPMorgan Securities were the bookrunners for the Regulation S deal.

The notes are guaranteed by China Taiping Insurance Holdings Co. Ltd., an insurance conglomerate based in Hong Kong.

Icici Bank does deal

Also on Wednesday, Icici Bank priced a RMB 500 million add-on to its existing 4.9% notes due Sept. 21, 2015 at 100.625 to yield 4.66%, a market source said.

HSBC and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The original issue totaled RMB 500 million and priced at par.

In other deal-related news, the Republic of Indonesia set price talk at the 3.35% area for its planned dollar-denominated offering of benchmark-sized 10-year Islamic bonds.

Deutsche Bank, HSBC and Standard Chartered are the bookrunners for the Rule 144A and Regulation S deal, which will be issued via special-purpose vehicle Perusahaan Penerbit SBSN Indonesia III.

Novatek mulls issuance

Russian independent gas producer Novatek is considering a $1 billion issue of notes that could come to the market before the end of the year, a market source said.

"This will be the first issue since January 2011," a London-based analyst said. "A potential new issue could be interesting depending on terms and pricing, as we view the outstanding bonds as fair value."

The market was expecting Novatek to announce issuance, given that the company is acquiring 49% of Russia's Nortgaz and will finance the deal with borrowings, she said.

"This is seen as a positive synergy for the group, which will strengthen Novatek's position as the main independent gas producer in Russia," she said. "Fitch has affirmed the ratings, however, as it anticipates that the modest excess in leverage which will result from this acquisition will moderate in the next couple of years."

IPIC roadshow planned

Abu Dhabi's IPIC will set out on a roadshow on Thursday for a Regulation S issue of dollar notes, a market source said.

BNP Paribas, JPMorgan, National Bank of Abu Dhabi, Natixis, RBS and Unicredit are the bookrunners for the deal, which may also include a tranche of euro notes.

The roadshow will begin in Frankfurt and Munich, then travel to Geneva, Zurich and London before concluding on Nov. 22 in Paris.

And South Africa's FirstRand Bank has set the tenor at 10 years for its planned issue of dollar-denominated notes, a market source said.

JPMorgan, Standard Chartered Bank, RBS, Rand Merchant Bank and Morgan Stanley are the bookrunners for the Regulation S deal.

New notes from Uruguay

These headlines followed Tuesday's news that Uruguay sold $500 million 4 1/8% notes due Nov. 20, 2045 at par to yield 4 1/8%, or Treasuries plus 140.9 bps via BNP Paribas Securities Corp. and Citigroup Global Markets Inc. in an SEC-registered deal.

The proceeds will be used to fund a tender offer and to refinance and retire indebtedness.

And the final book for China-based real estate developer Gemdale International Holding Ltd.'s $350 million issue of five-year notes that priced at par to yield 7 1/8% was $1.5 billion from 135 investors. About 89% of the orders came from Asia and 11% from Europe. Funds accounted for 52%, private banks 43% and banks and corporations 5%.

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

Kipco, ADIB see demand

In trading from the Middle East, demand was noted for bonds from Kuwait's Kipco, Abu Dhabi Islamic Bank (ADIB)'s perpetuals and Dubai.

ADIB's $1 billion issue of 6 3/8% perpetual Islamic bonds that priced at par were seen Wednesday at 104 on the bid side.

ADIB, HSBC, Morgan Stanley, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S-only sukuk.

"The Abu Dhabi market is on hold, awaiting IPIC and [Abu Dhabi National Energy Co.] issuance," a London-based source said.

QNB notes fairly active

The recent issue of $1 billion 2 1/8% notes due 2018 from Qatar National Bank SAQ that priced at 99.293 to yield mid-swaps plus 145 bps was seen trading at the 99.2 bid, 99¼ offered level, a trader said.

Deutsche Bank, HSBC, Mitsubishi UFJ Securities, QNB Capital and Standard Chartered were the bookrunners for the Regulation S-only deal.

Dubai Electricity and Water Authority's 2020s were trading well, about 32 bps tighter on the month, he said.

Egypt, Turkey get support

From Africa, Egypt's 2020 bonds saw some support while Access Bank and Morocco traded down a few times late in the day, a trader said.

And Turkey's corporate bonds continued to benefit from recent ratings upgrades, the London analyst said, with most banks well bid.

From Russia, most bonds were underperforming on Wednesday. "But VTB is seeing some buying today," she said.

Also experiencing demand were the perpetual notes from Sberbank and Gazprombank, she said.

Ukraine bonds dip

In other trading, bonds from Ukraine have been moving lower this week, with the sovereign's 2020s quoted at 102½ bid, 103½ offered, said Svitlana Rusakova of Dragon Capital.

Ukraine's 2021s were seen at 103¾ bid, 104¾ offered.

"In the corporate sector, sellers emerged," she said, noting that Metinvest's 2015s slipped to 101 bid, 102 offered and the 2018s to 94¼ bid, 95½ offered.

This came against the backdrop of the International Monetary Fund's recent visit to Ukraine, during which the sovereign was encouraged to implement a floating exchange rate "to better cushion themselves against external shocks," a London-based analyst said.

"The IMF also pressed on the need to raise gas prices for the general population and to engage in fiscal retrenchment to get its budget to target," she said.

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