Dubai Islamic Bank, Woori print notes; EM bonds resilient; Belarus, Croatia deals ahead

By Christine Van Dusen

Atlanta, Jan. 14 – Dubai Islamic Bank PJSC and South Korea’s Woori Bank sold notes and emerging markets assets were largely resilient on Wednesday as U.S. Treasuries rallied, providing a solid backdrop for investment-grade issuers.

“The market today, broadly speaking, was fairly impressive,” a trader said. “I suspect that’s symptomatic of large risk-clearing on the back of last week ... dealer and Street positions are and were a lot cleaner. The reaction yesterday and today to stock, commodity weakness has been fairly impressive, especially in Russian and African risk.”

From the Middle East, Abu Dhabi Commercial Bank PJSC’s 2023s traded higher, just a touch above par, “which hasn’t happened in a month,” a trader said.

Bahrain’s 2044s moved higher too, printing at 92 bid, 92¼ offered before closing at 92½ bid, 93 offered.

“Bahrain’s 2022s and 2023s still feel pretty well-supported,” he said. “The curve is very steep but looks to remain that way.”

Bonds from Asia finished the session unchanged but felt slightly firmer, a London-based trader said.

“The China oil complex closed 1 basis point to 3 bps wider, with Cnooc’s 2023s down at 178,” he said. “India’s corporates are finding some ground and closed roughly unchanged on the day.”

Property companies from China closed ¼ point to ¾ point lower, he said, while the curves for Indonesia and Philippines finished ¼-point higher.

Bonds from Central and emerging Europe put in a strong session on Wednesday, another trader said, even though spreads didn’t keep up with the move in rates.

“Cash prices are supported,” he said. “Romania’s 2044s are still in demand from accounts.”

From Latin America, the 2023 and 2025 notes from Toronto-based and Colombia-focused Pacific Rubiales Energy Corp. were seen in the low 50s in the Street amid quiet trading, a New York-based trader said.

This came as the company grappled with investor concern that the declining price of oil could cause Pacific Rubiales to break a rule – specifying its debt not exceed 3½ times its 12-month trailing earnings before interest, taxes, depreciation and amortization – and hamstring its efforts to boost production.

“Very ugly,” the trader said.

Dubai bank sells bonds

In its new deal, Dubai Islamic Bank sold $1 billion 6¾% perpetual notes at par to yield 6¾%, or mid-swaps plus 512.6 bps, a market source said.

The Islamic bonds were talked at a yield in the 7% area.

HSBC and Standard Chartered Bank were the joint structuring banks, and Al Hilal Bank, Dubai Islamic Bank, Emirates NBD Capital, HSBC, National Bank of Abu Dhabi, Noor Bank, Sharjah Islamic Bank and Standard Chartered Bank were the joint lead managers for the Regulation S sukuk.

“Traded two-way and closes at 99.65 bid, 99.95 offered here,” a trader said.

Woori prints notes

Also on Wednesday, South Korea’s Woori Bank priced $350 million 2 5/8% notes due July 22, 2020 at 99.649 to yield 2.694%, or Treasuries plus 135 bps, a market source said.

Barclays, Commerzbank, Deutsche Bank, HSBC, Nomura and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The lender is based in Seoul.

Belarus, Croatia seek issuance

In other deal-related news, Belarus is looking at printing a $1 billion issue of notes due in 10 years, a market source said.

And Croatia set the size at about €1 billion for its upcoming issue of notes, a market source said.

The sovereign started seeking out bookrunners in December.

No other details were immediately available on Wednesday.

“Croatia and Serbia have underperformed in recent sessions but tightened significantly yesterday, closing 15 bps tighter,” a trader said. “Both need to issue.”

Kexim unchanged

Korea Export-Import Bank’s new two-tranche issue of $2.25 billion notes due 2020 and 2025 rallied during early trading on Wednesday, a trader said.

But the notes closed unchanged, after sellers emerged, he said.

The $1 billion 2¼% notes due in 2020 priced at 99.821. The $1.25 billion 2 7/8% notes due 2025 priced at 99.483 to yield 2.935%, or Treasuries plus 120 bps.

BofA Merrill Lynch, Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan and RBS were the bookrunners for the Securities and Exchange Commission-registered deal.

Shenhua attracts orders

China Shenhua Overseas Capital Co. Ltd.’s new issue of $1.5 billion issue of notes in three tranches, due 2018, 2020 and 2025, attracted orders this week, a market source said.

The $500 million 2½% notes due 2018 that priced at 99.647 drew an order book of more than $1 billion from 85 accounts, with 94% from Asia and 6% from Europe.

The public sector picked up 41%, banks 26%, fund managers 24%, insurers and pension funds 7% and private banks 2%.

The $500 million 3 1/8% notes due 2020 that priced at 99.629 took in more than $1.6 billion in orders from 115 accounts.

The $500 million 3 7/8% notes due 2025 that priced at 99.076 saw more than $1.2 billion in orders from 110 accounts.

Shenhua trading ‘lackluster’

All three of China Shenhua’s new tranches put in “lackluster” performance in trading on Wednesday, a trader said.

Citigroup, HSBC and JPMorgan were the joint global coordinators, bookrunners and lead managers for China Shenhua’s new deal.

Deutsche Bank, Goldman Sachs, CICC HK Securities, ICBC International and BOCOM International were joint bookrunners and joint lead managers for the Regulation S issue.

“The curve was roughly 5 bps to 10 bps wider from reoffer,” he said. “Retail investor demand was slow, but we saw good real-money interest in the five-year tranche.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.