Primary hosts Lebanon; Borets advances deal; TSKB on deck; Asian trading mixed

By Christine Van Dusen

Atlanta, March 21 – Lebanon sold new notes and United Arab Emirates-based Borets Finance DAC advanced a new deal on a mixed Tuesday for emerging markets assets.

Also during the session, Turkey’s Turkiye Sinai Kalkinma Bankasi AS (TSKB) set initial talk in the 7 7/8% area for a $300 million issue of Regulation S green bonds due in 10 years.

“TSKB’s subordinated new-style tier 2 notes will be similar in structure to the ones already outstanding in Turkey,” a trader said. “In contrast to its commercial peers, TSKB is a private development bank with a focus on project finance lending ... we like TSKB’s niche role.”

Taking a look at the secondary market, EM assets saw buying and selling from European real-money accounts, another trader said.

“Asian [investors] keep on taking profits into higher cash prices, particularly in the shorter end,” he said. “The tone overall remains very firm, however, and as long as supply remains contained we can continue to grind lower in spread.”

But “valuations look pretty stretched here, so credit selection becomes key,” he said.

Some profit-taking was seen for bonds from India, “but not enough to budge spreads,” he said. “Korean papers were flat on the day, with the exception of the new Korea National Oil Corp., where bonds performed well in both the three-year and five-year issues.”

Investment grade names from Asia closed the day broadly unchanged, another trader said.

“The general market remains well-supported despite some outright selling,” he said. “China bank seniors are up or down 1 basis point.”

Asian sovereigns in focus

High-yield sovereigns from Asia opened Tuesday higher but closed unchanged to a quarter-point lower with rates, another trader said.

Philippines’ 2042s traded to a high of 98¼ before closing at 97 7/8 bid, 98 1/8 offered, he said.

“The Indonesia curve opened a half-point higher and closed unchanged to ¼ point lower in the long end,” he said.

Saudi Arabia sees activity

From the Middle East, the three-tranche issue of notes due in 2021, 2026 and 2046 from Saudi Arabia saw some activity in trading on Tuesday.

The 2 3/8% notes due in 2021 that priced at 99.007 to yield 2.588%, or Treasuries plus 135 bps, were seen at 97.81 bid, 98.06.

The 3¼% notes due in 2026 that priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, moved to 96.30 bid, 96½ offered.

And the 4½% notes due in 2046 that priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, were seen Tuesday at 97¾ bid, 97.87 offered.

Citigroup, HSBC, JPMorgan, Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, MUFG Securities, Morgan Stanley and NCB Capital were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general domestic budgetary purposes.

Equate trades

In other trading from the Middle East, investors showed some interest in Kuwait’s Equate Petrochemical Co. KSCC.

The company’s 3.944% Islamic bonds due 2024 that priced at par to yield mid-swaps plus 175 bps traded Tuesday at 101 bid, 101¾ offered, a trader said.

Citigroup, HSBC, JPMorgan, KFH Capital and NBK were the global coordinators and – with Mizuho, MUFG, National Bank of Abu Dhabi and SMBC Nikko – joint bookrunners for the deal.

Lebanon prices three tranches

In its new deal, Lebanon priced $3 billion of notes in three tranches due 2027, 2032 and 2037, according to an announcement from the sovereign.

The deal included $1.25 billion 6.85% notes due 2027 that priced at par to yield 6.85%.

The $1 billion 7% notes due 2032 priced at par to yield 7%.

And the $750 million 7¼% notes due 2037 also priced at par.

Barclays, Byblos Bank, JPMorgan and Societe Generale CIB were the bookrunners for the Regulation S deal.

Borets shares details

The new issue of five-year notes from United Arab Emirates-based Borets Finance will be dollar-denominated, according to a company announcement.

Goldman Sachs, HSBC, Sberbank CIB and SIB (Cyprus) are leading the deal.

The notes are expected to settle on or near April 7.

The proceeds will be used to repurchase the company’s outstanding $420 million 7 5/8% notes due 2018 and to pay costs, expenses and fees connected to the repurchase.

Borets makes electrical submersible pumps for the oil and gas industry and has its global headquarters in Dubai.

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