IPIC, China Development do multi-tranche deals; Greece on market's mind; spreads tighten

By Christine Van Dusen

Atlanta, Nov. 27 - Abu Dhabi's International Petroleum Investment Co. (IPIC) and China Development Bank sold notes on a Tuesday that saw emerging markets assets get a small boost from the news of a provisional deal to release €34.4 billion in aid to Greece.

"Active day, highlighted by an impressive return to the markets by IPIC," a London-based trader said.

But enthusiasm was dampened a bit by uncertainty about the deal's implementation, as well as limited progress in the United States' fiscal-cliff negotiations.

"Media reports indicate that the US fiscal cliff negotiations have not progressed much beyond the constructive statements from a week or so ago, with the gap between the two parties remaining wide," according to a report from Barclays. "Political risks on both sides of the Atlantic remain elevated and are likely to support market volatility into year-end."

Still, some issuers, including Hungary's Magyar Export-Import Bank, moved forward with plans for deals.

And spreads started the day tighter, with the Markit iTraxx SovX index spread narrower by 4 basis points and the corporate index spread tighter by 3 bps.

"The market is opening up stronger on the news," a London-based analyst said.

Quasi-sovereign names from Russia began the session as much as 8 bps tighter, while banks from Turkey were tighter by as much as 10 bps, she said.

"We will look to reduce some risk here given the uncertainty surrounding the fiscal cliff situation and the recent core stock rebound," she said. "We still feel year-end should be friendly for markets but we don't like this entry point."

IPIC prices three-tranche deal

In its new deal, Abu Dhabi investment vehicle IPIC priced a three-tranche issue of dollar and euro notes worth $2.9 billion and due in 2015, 2018 and 2023, a market source said.

The deal included $750 million 1¾% notes due Nov. 30, 2015 that priced at 99.762 to yield 1.832%, or mid-swaps plus 135 bps. The notes were talked at a spread of 135 bps to 140 bps over mid-swaps.

The second tranche, €800 million of 2 3/8% notes due May 30, 2018, priced at 99.583 to yield 2.459%, or mid-swaps plus 145 bps. The notes came in at the tight end of talk, set at mid-swaps plus 145 bps to 150 bps.

The third tranche, €850 million 3 5/8% notes due May 30, 2023, priced at 99.021 to yield 3.742%, or mid-swaps plus 195 bps, at the tight end of talk, set at mid-swaps plus 195 bps to 200 bps.

BNP Paribas, JPMorgan, National Bank of Abu Dhabi, Natixis, RBS and Unicredit were the bookrunners for the Regulation S-only deal.

New notes trade up

The new IPIC notes traded "slightly positive" in the gray market before pricing, a trader said.

After pricing, the new 2015 notes were up at par bid, 100¼ offered. The new 2018s were trading up at 99.8 bid, 100.2 offered. And the 2023s were quoted up at 99¾ bid, 100¼ offered.

"All three bonds are performing well, and once again the secondary is now repricing them higher, having traded a little heavy this morning and yesterday," he said.

The company's existing 2015 notes started the day at 103¼ bid, 104 offered and were later sighted at 103½ bid, 104¼ offered.

IPIC's existing 2016s opened at 110.62 bid, 111.37 offered and later traded at 110.62 bid, 111.37 offered.

And the existing 2041s began the session at 138 bid, 139 offered before trading at 138.18 bid, 139.18 offered.

China Development prints notes

Also on Tuesday, Beijing-based China Development Bank priced a two-tranche issue of $1.5 billion notes due 2017 and 2022 in a Regulation S transaction, a market source said.

The deal included $500 million 2% notes due 2017 that priced at 99.537 to yield Treasuries plus 145 bps. The notes were talked in the Treasuries plus 150 bps area.

The second tranche, $1 billion 3¼% notes due in 2022, came to the market at 99.223 to yield Treasuries plus 170 bps. Price talk was set at the Treasuries plus 175 bps area.

CDB Corp., Goldman Sachs, HSBC, Standard Chartered, Bank of America Merrill Lynch, CCBI, Citigroup, Deutsche Bank, Morgan Stanley and RBS were the bookrunners for the deal.

Kazakhstan bank sells bonds

These new deals followed JSC Development Bank of Kazakhstan's $1 billion issue of 4 1/8% notes due Dec. 10, 2022, which priced Monday at 98.382 to yield mid-swaps plus 262.5 bps, a market source said.

The notes were talked at a spread in the high-200 bps area.

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

Market sources also were whispering about possible issuance ahead for Kazakh Samruk-Energy JSC.

Magyar taps bookrunner

In deal-related news, Hungary-based Magyar Export-Import Bank has mandated Jefferies International Ltd. as the bookrunner for a €2 billion notes program, a market source said.

Jefferies and Deutsche Bank are arranging a roadshow this week that will travel to Los Angeles, San Francisco, Boston and New York before concluding on Dec. 3.

A Rule 144A and Regulation S deal may follow.

And Nigeria's Zenith Bank plc is planning a non-deal roadshow, a market source said.

Cosco deal oversubscribed

Taking a look at recent new issues, Beijing-based China Cosco Holdings Co. Ltd.'s new $1 billion issue of 4% notes due Dec. 3, 2022 drew $11 billion in orders from 311 accounts, a market source said.

The notes priced Monday at 98.766 to yield Treasuries plus 250 bps, at the tight end of talk, via BOCI and HSBC in a Regulation S deal.

The proceeds will be used to on-lend to the company's offshore subsidiaries and affiliates for their general corporate purposes.

Big final book for Icici

The final book for India-based Icici Bank Ltd.'s $250 million increase of its existing 4.7% notes due Feb. 21, 2018 was $1.4 billion from 140 accounts.

The notes came to the market at 102.953 to yield Treasuries plus 340 bps with Bank of America Merrill Lynch, Citigroup, HSBC, JPMorgan and Standard Chartered in a Rule 144A and Regulation S deal.

About 68% of the orders came from Asia and 32% from Europe.

Funds and asset managers picked up 53%, banks and private banks 23%, insurers 10%, corporates 7% and others 7%.

The original issue totaled $750 million and priced at 99.813 to yield 4.739%, or Treasuries plus 400 bps.

Grupo Posada attracts orders

Also oversubscribed was Mexico-based hotel chain Grupo Posadas SAB de CV's $210 million 7 7/8% notes due in 2017.

The notes priced at 99.493 to yield 8% via Bank of America Merrill Lynch, Deutsche Bank, Citigroup and JPMorgan in a Rule 144A and Regulation S deal.

The final book was about $1 billion.

Proceeds will be used to finance the tender of the company's 2015s and for other existing indebtedness.

Middle East in focus

In trading, Qatar-based Qtel International's 2025s were very well offered on Tuesday, printing at 1121/4, up 15 bps on the week.

And Saudi Electricity Co.'s 2022s were quoted at 108.18 bid, 108.48 offered, a trader said.

Most bonds from Dubai got a lift on Tuesday, including those from Dubai Holdings.

"This credit, to my mind, still looks interesting, especially versus its peer group," he said. "Dubai 2022s now have a 113 handle and Jafza Holdings is at 1121/4, bid side."

From Africa, Nigeria's 2021s continued to perform well, particularly as compared to Senegal, Zambia and Namibia, a trader said.

"Egypt was marked lower yesterday, moved higher today," he said.

Ukraine bonds stabilize

Bonds from Ukraine have been mostly unchanged so far this week and are managing to avoid selling pressure, said Svitlana Rusakova of Dragon Capital.

The sovereign's 2107s were seen at 108 bid, 108¾ offered.

Ukraine's new 2022s - $1.25 billion 7.8% notes that priced at par to yield Treasuries plus 618.7 bps - were trading above par. Later, the notes were seen at 100¾ bid, 101½ offered.

"Liquid corporates started to catch up with sovereigns," she said.

She pointed to Oschadbank, which was sighted moving up to 95 bid, 96 offered. Metinvest's 2018s, meanwhile, were quoted at 94½ bid, 95½ offered.

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