City Developments sells notes; Russia reacts to Cyprus news; ADCB notes trade impressively

By Christine Van Dusen

Atlanta, March 20 - Singapore's City Developments Ltd. priced notes on Wednesday as Cyprus remained in focus, with investors digesting the news that the troubled sovereign's parliament had rejected a levy on deposits.

"Cyprus continues to dominate market attention," a London-based analyst said. "Last night's vote failed to pass, but with another bank holiday today, we will look for further news on a solution to the crisis. Cypriot leaders have begun discussions with Russia about a possible alternative bailout."

Russian depositors stand to lose as much as $2 billion with a levy, she said. In response, many clients of OAO Gazprombank are moving their assets and accounts away from Cyprus.

Still, Russian corporate bonds didn't react strongly on Wednesday, with most high-yield names unchanged and some quasi-sovereign banks drifting slightly lower.

And overall, "core markets have calmed, with stocks rebounding and Treasuries backing up," she said.

Said a London-based trader, "Fairly active session, all told, with good interest across the board."

He pointed to the recent 2023 notes from Abu Dhabi Commercial Bank, which printed at about 102 on Wednesday, up 3 points from issuance.

"Very impressive effort, and still seeing buyers regionally," he said.

Demand was also solid for Abu Dhabi Islamic Bank's perpetual notes, which traded between 104.25 and 104.50.

"Dubai Islamic Bank was quite in contrast, holding just above the par level," he said.

Also from the Middle East, Saudi Arabia was placed on positive watch by Fitch Ratings, which gave Saudi Electricity and Water Authority's bonds a boost.

"SECO's 2022 is active today with some sellers around," he said. "The bond is 20 bps wider on the week, closing at 107.15 bid, 107.40 offered."

City Developments does deal

In its new deal, Singapore's City Developments priced a S$150 million issue of 3.48% notes due April 3, 2023 at par to yield 3.48%, a market source said.

Standard Chartered Bank was the bookrunner for the Regulation S deal.

City Development is a property developer and owner.

Jafza, Emirates in focus

In trading on Wednesday, Jafza Holdings experienced some two-way activity between 113.87 and 114.37.

And some market sources were whispering about further funding needs for Emirates airline.

"The money will be raised from a mixture of commercial banks, operating leases and some export credits," a trader said. "I would suspect, as we've seen so far this year, they may have to turn more to the bond market. They have issued twice this year after last issuing dollar bonds in June 2006."

BankMuscat draws orders

Emerging markets investors were particularly interested in the new issue of $500 million 2½% notes due 2018 from Oman's BankMuscat, which priced at 99.302 to yield mid-swaps plus 170 bps.

The deal drew $3.35 billion from about 205 orders, with 38% from the Middle East, 39% from the European Union, 15% from Asia and 9% from the offshore United States.

Citigroup, Credit Agricole CIB, Deutsche Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Fund managers picked up 46%, banks 33%, hedge funds 7%, private banks 6% and others 8%.

New notes 'liquid,' 'stable'

The new 2018 notes from BankMuscat were "very active," a trader said.

"The bond has been very liquid and fairly stable for the most part, but a bias to international selling and local buying," he said. "Still, it's a rare issuer. However, for international investors, the bond is probably not that exciting. And given the backdrop and the volatility elsewhere, it probably falls into the sell-and-move-on bucket."

Most of the trading was seen between 99.30 and 99.40 on Wednesday.

"The recent BankMuscat is proving very liquid and active," the analyst said.

Emirates NBD plans roadshow

In deal-related news, Dubai-based financial services company Emirates NBD PJSC will embark on a roadshow starting Friday for a benchmark-sized issue of dollar notes, a market source said.

Citigroup, Emirates NBD Capital, HSBC, JPMorgan, Societe Generale CIB and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The roadshow will take place in Asia and Europe.

"ENBD is joining the party, as expected," a trader said. "They are rated Baa1 by Moody's and A+ by Fitch, and obviously a huge bank by assets. So it will be interesting to do the back-of-the-envelope calculations on where this one should print."

Bank Asya sets talk

Turkey's Asya Katilim Bankasi AS (Bank Asya) set initial talk at the mid-7% area for its 10-year issue of dollar-denominated Islamic bonds, a market source said.

The Regulation S notes will be issued by Asya Sukuk Co. Ltd. via bookrunners BofA Merrill Lynch, ENBD Capital, HSBC and National Bank of Abu Dhabi.

A roadshow began on March 14.

This came against the backdrop of two-way flows for Turkish banks in trading on Wednesday, the analyst said.

Notes ahead for Polish TV

Polish Television Holding BV is planning a two-tranche issue of euro-denominated notes, with both due in seven years and non-callable for three years, a market source said.

The first tranche, to be issued by TVN Finance, will consist of €485 million seven-year notes.

The second tranche of seven-year notes will be issued by PTH and total €330 million.

JPMorgan, Nomura Securities and BNP Paribas are the bookrunners for the deal.

The proceeds will be used to refinance existing notes.

Dorsett will hit the road

China-based Dorsett Hospitality International Ltd.'s planned renminbi-denominated issue of bonds will be marketed during a roadshow that begins Thursday, a market source said.

The Regulation S roadshow will take place in Hong Kong and Singapore.

Barclays Bank plc, Citic Securities Corporate Finance (HK) Ltd., Deutsche Bank AG, Hong Kong Branch and HSBC are the joint lead managers and bookrunners.

Hong Kong-based Dorsett Hospitality International operates hotels in Hong Kong, China, Singapore and Malaysia.

Tianneng plots issuance

Hong Kong-based Tianneng Power International Ltd. is planning a roadshow to market an issue of dollar-denominated notes, according to a company filing.

Deutsche Bank is the bookrunner for the Rule 144A and Regulation S deal.

The proceeds will be used to refinance existing indebtedness, to fund capital expenditures and for other general corporate purposes.

Tianneng Power manufactures battery products, primarily for electric bikes.

IDBI oversubscribed

The final book for India-based IDBI Bank Ltd.'s new $500 million issue of 3¾% notes due Jan. 25, 2019 was $2.25 billion from 190 investors, a market source said.

The notes priced at 99.786 to yield 3.792%, or Treasuries plus 300 bps via HSBC and Standard Chartered Bank in a Regulation S deal.

About 63% of the orders came from Asia and 37% from Europe.

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