Primary hosts deals from Emirates NBD, African Development Bank; Pacific Rubiales suffers

By Christine Van Dusen

Atlanta, March 16 – Emirates NBD and sold notes on Monday while terms emerged on an offering from African Development Bank as Latin American bonds were mixed in trading, with Brazil-based Pacific Rubiales Energy Corp.’s bonds plummeting after a contract change.

Ecopetrol SA is looking for other operators of the Rubiales Field and not continuing its contract with energy company Pacific Rubiales when the contract expires next year, a New York-based trader said. That sent Pacific Rubiales’ bonds plummeting about 9 points on Monday – after Friday’s oil prices-related tumble of about 6 points.

Elsewhere in Latin America, Brazil’s bonds were strong at the start of the session but petered out and widened later in the day, he said. Argentina’s bonds, however, ticked up, as investors remained nervous about liquidity and rates.

Brazil-based Petroleo Brasileiro SA continued to falter, with its curve gapping on Monday to all-time wides, he said.

In trading from Asia, bonds were a bit “defensive” on Monday as investors kept an eye on the Federal Open Market Committee, a London-based analyst said.

“Lower oil prices once again raised concerns, with oil-related corps and Malaysia under pressure,” he said. “High-grade cash closed the day 2 basis points to 5 bps wider.”

Bonds from Korea were firm, particular on the short end of the curve, he said.

In deal-related news, Bahrain’s BBK BSC and Singapore’s Centurion Corp. Ltd. set talk while India’s IL&FS Transportation Networks Ltd., Singapore’s BOC Aviation Pte. Ltd. and Colombia Telecomunicaciones SA ESP (ColTel) announced roadshows.

Market sources were also whispering about a possible issue of dollar bonds from Export-Import Bank of India.

Asia in focus

Among high-yield corporate bonds from Asia, Chinese property companies closed ¼ point to ½ point lower as Kaisa Group Holdings Ltd. announced it was unprofitable last year and considered a debt restructuring proposal that many investors don’t like.

“Bonds closed ½-point to 1 point lower,” a trader said.

High-yield Asian sovereigns were mixed on Monday, with the Philippines curve unchanged but 3 bps to 5 bps wider on spread, he said.

“The Indonesia curve was heavy, with the long end down ¾ point to 1 point and the belly ¼ point to ½ point lower,” he said. “Indonesia’s 2045 traded down from 101 3/8 to the lows of 100 5/8. Bonds recovered slightly, to close at 100 5/8 bid, 100 7/8 offered.”

Petronas widens

Also on Monday, Malaysia-based Petroliam Nasional Bhd.’s (Petronas) new 10-year and 30-year bonds underperformed, a trader said, closing between 3 bps and 8 bps wider.

The oil company’s recent deal included $1.25 billion 2.707% Islamic bonds due in 2020 that priced at par to yield Treasuries plus 110 bps and $750 million 3 1/8% notes due 2022 that priced at 99.39 to yield Treasuries plus 130 bps.

“The seven-year tranche was well-supported, with very few loose bonds,” he said. “The five-year sukuk was quiet.”

The deal also included $1.5 billion 3½% notes due in 2025 that priced at 99.125 to yield Treasuries plus 150 bps and $1.5 billion 4½% notes due in 2045 that priced at 98.767 to yield Treasuries plus 190 bps.

BofA Merrill Lynch, CIMB and Deutsche Bank were the bookrunners for Regulation S deal.

ICBC trades up

The new issue of 3¼% notes due in 2020 that Industrial and Commercial Bank of China Ltd. priced last week at 98.957 to yield Treasuries plus 190 bps traded Monday at 169 bid, 166 offered, a trader said.

The deal also included 2 5/8% notes due 2018 that priced at 99.493 to yield Treasuries plus 175 bps.

Citigroup, ICBC Asia, ICBC International, JPMorgan, Morgan Stanley and Standard Bank were the bookrunners for the Regulation S deal.

The proceeds will be used for the acquisition of assets.

Issuance from Emirates NBD

In its new deal, Dubai’s Emirates NBD sold €550 million 1¾% notes due March 23, 2023 at 99.824 to yield mid-swaps plus 135 bps, a market source said.

The notes were talked at a spread of mid-swaps plus 140 bps to 150 bps.

BofA Merrill Lynch, BNP Paribas, Deutsche Bank, Emirates NDB Capital, HSBC and ING were the bookrunners for the Regulation S deal.

Emirates NBD is a provider of corporate, consumer, treasury and investment banking and asset management services.

African bank sells bonds

In another new deal, African Development Bank priced $154 million 10% notes due Nov. 9, 2018 at 130.462 for proceeds of $200.91 million, according to a company filing.

HSBC was the sole bookrunner for the transaction.

The issuer is a regional development lender with headquarters in Tunis, Tunisia.

BBK sets talk

Bahrain’s BBK set talk in the mid-swaps plus 200-bps area for a euro-denominated issue of benchmark-sized seven-year notes, a market source said.

BNP Paribas, HSBC and National Bank of Abu Dhabi are the bookrunners for the Regulation S deal.

The notes are expected to price on Tuesday.

BBK is a retail lender that is part-owned by the government of Bahrain.

Guidance from Centurion

Singapore’s Centurion set talk in the 5% area for a Singapore dollar issue of notes due in five years, a market source said.

DBS and RHB Securities are the bookrunners for the Regulation S deal.

Proceeds from notes issued under the program will be used for general corporate purposes, including refinancing borrowings, financing investments and general working capital.

Centurion, formerly known as SM Summit Holdings Ltd., is a workers accommodation provider based in Singapore.

IL&FS on roadshow

India’s IL&FS Transportation Networks is on a roadshow for a renminbi-denominated issue of notes, a market source said.

CLSA, ANZ, HSBC and Standard Chartered Bank are the bookrunners for the Regulation S transaction.

The roadshow began on Monday.

IL&FS Transportation is a surface transportation infrastructure company based in Mumbai, India.

Roadshow for BOC Aviation

Singapore’s BOC Aviation has mandated BOC International, Citigroup, HSBC and JPMorgan to arrange a roadshow that will start on Wednesday, a market source said.

A Rule 144A and Regulation S issue of dollar-denominated notes is expected to follow.

The Singapore-based aircraft leasing company is wholly owned by Bank of China.

ColTel to market deal

Colombia’s ColTel will set out on Tuesday for a roadshow to market a dollar-denominated issue of notes, a market source said.

BBVA, HSBC, Citigroup and Credit Suisse are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will begin on Tuesday in Bogota and travel to Santiago, London, Singapore, Switzerland, Hong Kong, Lima, Boston, Los Angeles and Miami before concluding on March 24 in New York.

The telecommunications company is based in Bogota.

Iraq seeks issuance

Iraq is seeking to issue up to $6 billion of notes, a market source said.

Other details were not immediately available on Monday.

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