Poland, Banco Continental print notes amid 'poor tone' for EM market; Colombia sets talk

By Christine Van Dusen

Atlanta, Jan. 10 - The Republic of Poland, Peru's BBVA Banco Continental SA and Dubai's EIB Sukuk Co. Ltd. priced notes on a Tuesday that saw mixed trading and limited liquidity.

"There's a poor tone, for the most part," a trader said during the European morning. "Flow-wise, it's a mixed bag here. It's fairly active, and while it is thin and generally painful in this market, it's nonetheless interesting with a sprinkling of new issues."

Liquidity was drying up, he said.

"Even though we are in what should be a very liquid time of year, it feels a lot more like November and December to me," he said. "It's a tad concerning."

In trading, Qatar's Qtel International moved 5 basis points to 8 bps wider while the sovereign bonds moved lower, he said. And good selling was seen for Abu Dhabi-based International Petroleum Investment Co. and Abu Dhabi's 2014s and 2019s.

"Both bonds normally trade like rocks," he said. "Qtel paper felt like it was flying around on the long end."

Buyers remained for Dubai Holding's 2012s near the low- to mid-99 level while Bahrain's 2018s held in at about 103.5 bid, 104 offered, or 10 bps tighter on the month.

In other news from the Middle East, Dubai's EIB Sukuk priced a $500 million issue of sukuk notes due Jan. 18, 2017 at par to yield 4.718%, or mid-swaps plus 350 bps, a market source said.

"If you have your Middle East and North Africa banking hat on, I think it looks OK," a trader said. "Looking at it versus other parts of Dubai, it probably looks rich."

Citigroup, Emirates NBC Capital Ltd., HSBC, National Bank of Abu Dhabi, RBS and Standard Chartered Bank were the bookrunners for the deal, which priced in line with talk.

EIB Sukuk is a unit of Emirates Islamic Bank, a Dubai-based lender.

"The bond did a lot of work around the 100.10 mark," another trader said, "so [it was] above reoffer, yes, but not running away."

Tamweel launches sukuk notes

Also from the Middle East on Tuesday, Dubai-based real estate developer Tamweel PJSC launched a $300 million issue of five-year sukuk notes, a market source said.

Citigroup, Deutsche Bank and Standard Chartered are the bookrunners for the deal.

Pricing is expected to take place this week.

And Abu Dhabi-based lender First Gulf Bank PJSC set initial price talk for its planned $500 million issue of five-year notes at mid-swaps plus 287.5 bps, a market source said.

Citigroup, HSBC, National Bank of Abu Dhabi and Standard Chartered are the bookrunners for the sukuk deal.

"Their 2016s this morning traded at z-spread plus 238 bps and subsequently closes down a point," a trader said. "The new one seems priced OK, but there seems a little supply out there and whether the appetite is there for the paper is the question."

Primary picks up

In its new deal, Poland priced a €750 million tap of its 3¾% notes due March 29, 2017 at 98.284 to yield 4.121%, or mid-swaps plus 237 bps, a market source said.

Barclays Capital, Societe Generale and Unicredit were the bookrunners for the deal.

And Peru-based lender BBVA Banco Continental priced a $500 million issue of senior notes due Jan. 18, 2017 at par to yield 5¾%, a market source said.

The notes were talked at 5 7/8%.

BBVA, Goldman Sachs and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes.

Colombia talks tap

Colombia set price talk for its planned tap of its 6 1/8% notes due Jan. 18, 2041 at the Treasuries plus 195 bps area, a market source said.

HSBC and JPMorgan are the bookrunners for the Securities and Exchange Commission-registered notes, which include a make-whole call at Treasuries plus 25 bps.

Proceeds will be used for liability management transactions and for 2012 budgetary expenditures.

The original issue totaled $1 billion and priced on Oct. 20, 2009.

Roadshow for Shui On

Shui On Development (Singapore) - a subsidiary of Shanghai-based property developer Shui On Land Ltd. - set out on Tuesday for a roadshow to market a possible offering of Singapore dollar-denominated notes, a market source said.

Standard Chartered, BNP Paribas, Deutsche Bank and UBS are the bookrunners for the Regulation S deal.

Proceeds will be used to fund capital expenditures and to acquire, develop, construct or improve assets.

And China Development Bank has tapped Barclays Capital, Citigroup, HSBC, Deutsche Bank, Standard Chartered Bank and RBS as the bookrunners for a renminbi-denominated issue of benchmark-sized notes, a market source said.

The Regulation S deal is expected to price soon.

LS Finance plans dollar bonds

Also from Asia, Hong Kong's LS Finance (2017) Ltd. was planning a dollar-denominated issue of fixed-rate notes, according to a company announcement.

Bank of America Merrill Lynch and JPMorgan are the bookrunners for the deal.

Proceeds will be used for capital expenditures related to new department store projects in China.

LS Finance is a subsidiary of Hong Kong-based retail company Lifestyle International Holdings Ltd.

Russia stays strong

In other trading on Tuesday, Russia stayed strong, a London-based trader said.

"If you just trade Russia, you could easily be fooled into thinking the world is a very rosy place," he said. "The whole sector, both quasi-sovereign and corporate, is very strong."

Elsewhere, he said, the picture was mixed.

"The new South Africa is seeing no support on the open, so dropping a half-point as the early flippers are flushed out," he said.

Said another trader, "The most recent deals in the EM space, Indonesia and South Africa, haven't exactly flown out the door in secondary trading."

Turkey also remained under pressure on Tuesday, the London trader said.

"Speculation continues that they will also look to print a new issue," he said.

Royal Capital oversubscribed

In other news, the final book for Philippines-based Royal Capital BV's $150 million tap of its 8 3/8% perpetual notes was $400 million from more than 60 investors, a market source said.

The notes priced Monday at 98.375, a market source said, and the original tranche totaled $200 million.

Citigroup and HSBC were the bookrunners for the Regulation S notes, which are guaranteed by parent company International Container Terminal Services Inc., a Manila, Philippines-based port and terminal developer and manager.

About 95% of the orders came from Asia and 5% from Europe. Private banks accounted for 50%, asset managers 40% and banks 10%.

BTA Bank in focus

Some market-watchers were continuing to keep tabs on Kazakhstan-based BTA Bank, which recently missed a payment of its coupon and could be embarking on a second restructuring.

On Tuesday, the company's chief executive officer reportedly resigned after disagreements about the restructuring and the Central Bank's governor said negotiations with creditors will take place in February.

"This, however, brings the question: what happens to the coupon?" a London-based analyst said. "Does this assume that the coupon will be paid for stakeholders to have time to go through the negotiation process or is it calling for a compromise on the coupon so restructuring can take place without acceleration of any of the liabilities? It remains unclear to us. The smoothest thing to do, in our view, is to buy time by paying the coupon. However, history shows that this is not necessarily a prerequisite for negotiations with creditors."

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