Icici issues bonds; bonds move on oil prices amid limited liquidity; Bahrain notes suffer

By Christine Van Dusen

Atlanta, Dec. 9 – India’s Icici Bank Ltd. sold notes on a Tuesday that saw investors take a risk-off approach to emerging markets assets, particularly those from Asia and some of Latin America.

“As commodities continue to trade poorly and year-end liquidity remains dire, we’ve seen some serious moves on plenty of bonds,” a London-based trader said.

Indonesia’s 2044s traded up a ¼ point to 125 5/8 while China’s Agile Property Holdings Ltd. saw its 2017s trade down at 96, a London-based analyst said.

High-grade bonds from Asia were unchanged to 3 basis points wider on Tuesday morning, with notes from Malaysia energy-focused corporates hurt by the plunge in oil prices, the analyst said.

“China high-yield oil corporates were marked 2 bps to 5 bps lower as well,” he said. “India consolidated after the rally yesterday, with the sector unchanged to a couple bps wider.”

From the Middle East, Bahrain bonds – particularly the 2044s – were hard-hit, moving 25 bps to 55 bps wider across the curve over the month in response to the change in oil prices, the trader said.

“Yes, the Middle East is always an oil and gas play, and the sentiment and selling pressure typically will hit the entire market,” he said. “However, they have geared their economy much more away from oil in recent years. Bahrain once again has been [targeted], but my suspicion is local accounts will be back adding this name in the next four to five weeks.”

In deal-related news, Croatia set a roadshow and India’s Reliance Industries and China’s Citic Ltd. took steps toward printing new deals.

Turkey, Morocco improve

Meanwhile, bonds from Turkey and Morocco traded slightly better, the London trader said

“Bonds in the Russian space continue to trade in a liquidity vortex, with significant spread moves over the week, month, quarter, year and any other time horizon you want,” he said.

Lat-Am in focus

Also on Tuesday, bonds from Brazil corporates widened yet again, with Petroleo Brasileiro SA and Vale SA moving as much as 25 bps wider on light volumes and inquiry, a New York-based trader said.

Notes from Brazilian steel companies were lower and illiquid, which raised some concern, given that those issues are often strong performers, he said.

The only liquidity he saw in the sector was among bonds from Mexico’s Cemex SAB de CV, which have been dropping a little bit each day.

Colombia’s Ecopetrol SA weakened again amid concern about oil prices, he said, but managed to recover somewhat by the end of the day.

Icici Bank prints notes

In its new deal, India’s Icici Bank printed a $200 million tap of its 3½% notes due March 18, 2020 at 100.686 to yield 3.356%, or Treasuries plus 165 bps, a market source said.

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

The original issue priced in September at 99.653 to yield Treasuries plus 180 bps with BofA Merrill Lynch, Citigroup, Deutsche Bank and HSBC.

The final book was $700 million from 51 accounts, with 39% from the Middle East, 32% from Europe and 29% from Asia.

Banks picked up 43%, fund managers 28%, sovereign wealth funds 15% and private banks 14%.

Croatia, Wuzhou set roadshows

Croatia will set out in January for a roadshow to market a euro-denominated issue of notes, a market source said.

And Hong Kong-based real estate developer Wuzhou International Holdings Ltd. has mandated UBS for a non-deal roadshow, a market source said.

The roadshow will start on Thursday in Hong Kong and end Friday in Singapore.

Reliance picks bookrunners

Mumbai-based conglomerate Reliance Industries has mandated Barclays, Citigroup, Deutsche Bank, JPMorgan and Morgan Stanley as the active bookrunners for a dollar-denominated issue of notes, a market source said.

ANZ, BNP Paribas, Credit Agricole and RBS are the passive bookrunners.

Citic to issue notes

China’s Citic is planning to issue up to $9 billion of bonds during the next 12 months, a market source said.

HSBC and UBS are the arrangers for the Rule 144A and Regulation S debt program.

Citic is a Hong Kong-based conglomerate that focuses on raw materials and infrastructure.

Cosan postpones

Brazil’s Cosan Overseas Ltd. has postponed plans for a dollar-denominated issue of notes that would have been used to fund a tender of its 8¼% perpetual notes, a market source said.

BofA Merrill Lynch, Bradesco, Itau BBA and Morgan Stanley were to lead the deal.

Cosan took in tenders for $365,743, or 73.15%, of its $500 million of 8¼% perpetual notes by 11 a.m. ET on Dec. 1, the early tender date for the company’s cash tender offer and consent solicitation that began Nov. 18.

According to a press release, settlement for notes tendered by the early date is expected to occur on Dec. 10. The company said in the release that its obligation to purchase the tendered notes is conditional on the satisfaction or waiver of some conditions, including a financing condition.

Cosan is an ethanol and sugar company based in Sao Paulo.

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