Doosan, Bumi Serpong Damai sell notes; Kaisa defaults; Envirotech, Sinopec line up deals

By Christine Van Dusen

Atlanta, April 20 – South Korea’s Doosan Heavy Industries & Construction Co. Ltd. and Indonesia’s PT Bumi Serpong Damai Tbk sold notes on a slightly weaker Monday for Asian bonds.

High-grade cash notes moved 3 basis points to 5 bps wider as investors continued to digest new issues, a London-based trader said.

“Selling subsided in the afternoon session and fast-money and real-money accounts stepped in, taking us back to close the day unchanged to 3 bps wider,” he said.

China-based Cnooc saw its 2024s trade to its wides, he said, while the new notes from Malaysia received solid support, with the 2025s trading up at 112 bps.

The sovereign recently priced a $1.5 billion two-tranche issue of Islamic bonds due in April 22 of 2025 and 2045, a syndicate source said.

The deal included 3.043% notes due 2025 that priced at par to yield Treasuries plus 115 bps and 4.236% notes due 2045 that priced at par to yield Treasuries plus 170 bps.

CIMB, HSBC and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

In other trading from Malaysia, state oil company Petroliam Nasional Bhd.’s (Petronas) notes were well supported on Monday, he said.

Its recent deal included 2.707% Islamic bonds due 2020 that priced at par to yield Treasuries plus 110 bps, 3 1/8% notes due 2022 priced at 99.39 to yield Treasuries plus 130 bps and 3½% notes due 2025 priced at 99.125 to yield Treasuries plus 150 bps.

The deal also included 4½% notes due 2045 that priced at 98.767 to yield Treasuries plus 190 bps.

“The curve closed, generally, unchanged,” he said.

In deal-related news, market sources were whispering about a possible issue of dollar notes from Bangladesh, euro notes from Azerbaijan and dollar notes from Bharat Petroleum (BPCL).

Asian bonds lower

Among high-yield Asian names, property companies from China were lower by about ¼ point to 3/8 point, a trader said.

“High yield sovereigns closed broadly unchanged and quiet, 2 bps to 4 bps wider on spread,” he said. “Indonesia long end is still heavy, with the curve ¼ point lower.”

Kaisa defaults

Investors were also keeping an eye on China-based Kaisa Group Holdings Ltd., which defaulted on its dollar debt after missing two payments, a trader said.

This is just the latest in a string of headlines about the company, which has been part of a graft investigation and recently reappointed its founder as chief executive, a move that at first seemed to boost the market’s confidence in the property development company’s ability to restructure its debt.

Kaisa’s 2017 bonds declined in response, the trader said, moving to 57¼ bid, 59¼ offered.

Russia in focus

Taking a look at Russia, bonds are expected to rebound amid oil market dynamics and decisions from ratings agencies, according to a report from Schildershoven Finance BV.

From the corporate arena, Russia-based Brunswick Rail announced that its capital structure was struggling and that the company was suffering big losses as a result of the ruble’s decline.

“Brunswick Rail is considering multiple options to optimize its capital structure, though it hasn’t made any decisions yet,” the report said.

The company’s eurobonds were already trading at 45% to 55% of par, so “the company’s announcement is not likely to have immediate effect,” the report said. “However, as the debt restructuring is quite possible, we do not rule out a further price decline. All depends on restructuring terms.”

Bumi Serpong prints notes

Indonesia-based Bumi Serpong Damai priced a downsized $225 million issue of 6¾% notes due April 27, 2020 at par to yield 6¾%, a market source said.

The notes were initially expected to total $250 million and were talked at a yield in the 7% area.

Citigroup and UBS were the bookrunners for the Regulation S notes.

The proceeds will be used for the development of new investment properties and infrastructure, for land bank acquisitions and for general corporate purposes.

Bumi Serpong Damai is a privately developed planned community in the Tangerang District of the greater Jakarta region in Indonesia.

Doosan sells bonds

South Korea’s Doosan priced $500 million 2 1/8% notes due April 27, 2020 at par to yield 2 1/8%, or Treasuries plus 95 bps, a market source said.

The notes were talked at a spread of 95 bps to 100 bps.

HSBC, Morgan Stanley and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The notes are guaranteed by the Export-Import Bank of Korea.

The construction equipment manufacturer is based in Changwon, South Korea.

Southern Copper launches bonds

Phoenix-based and Latin America-focused Southern Copper Corp. launched a two-tranche issue of $2 billion notes due in 2025 and 2045, a market source said.

The $500 million 10-year notes launched at Treasuries plus 205 bps after talk in the 210-bps area.

The $1.5 billion 30-year notes launched at Treasuries plus 340 bps after talk in the 345-bps area.

Credit Suisse, Morgan Stanley, BofA Merrill Lynch, HSBC and UBS were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes, including financing of the company’s capital expenditures program.

Southern Copper is a mining, smelting, refining and exploration company with operations in Peru, Mexico, Argentina, Chile and Ecuador.

Envirotech markets dollar MTNs

Singapore’s United Envirotech Ltd. has increased the amount for its medium-term note program from $300 million to $500 million, a market source said.

Standard Chartered Bank is the arranger and dealer for the program, which is being marketed during a roadshow on Monday in Singapore and Tuesday in Hong Kong.

In June 2013, the company announced plans to issue notes in any currency, including Singapore dollars, United States dollars and renminbi.

Proceeds will be used to refinance existing borrowings, for investments and acquisitions and for general working capital and corporate purposes.

The Singapore-based environmental solutions company focuses on water and wastewater treatment.

Sinopec picks bookrunners

China Petrochemical & Chemical Corp. (Sinopec Group) has mandated Citigroup, HSBC, Goldman Sachs, Bank of China and Deutsche Bank as joint global coordinators for a dollar- or euro-denominated issue of notes, a market source said.

The Beijing-based company also has mandated Citigroup, HSBC, Goldman Sachs, Bank of China, Deutsche Bank, BofA Merrill Lynch, CCB International, DBS Bank, ICBC International, ING, JPMorgan, Mizuho Securities, Morgan Stanley, Societe Generale CIB and Standard Chartered Bank as joint bookrunners and joint lead managers.

A series of investor calls began on Monday for the notes, which would be offered by subsidiary Sinopec Group Overseas Development (2015) Ltd.

Chinese bank seeks issuance

China Construction Bank (Asia) Corp. Ltd. is looking to issue new notes, a market source said.

Other details were not immediately available on Monday.

The lender is based in Beijing.

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