Indonesia sukuk put in strong performance; other Asian bonds tighten; Evergrande does deal

By Christine van Dusen

Atlanta, March 23 – The strong performance of Indonesia’s new two-tranche deal spurred a modest risk-on tone on a Friday that saw China Evergrande Group sell notes while investors digested the news that House Republican leaders were abandoning their health care bill.

“Yesterday’s vote on the American Health Care Act, which has been postponed to today, will keep markets in suspense,” a London-based analyst said on Friday morning.

Trading of Asian bonds was mostly light on Friday, “although sentiment definitely felt better, with some more conviction-buying following London open,” a trader said. “Despite that, volumes were again low.”

Most of the limited action took place among Chinese assets, he said, with other Asian names finishing unchanged to 2 basis points tighter on thin liquidity.

Activity picked up slightly during the Asian afternoon, another trader said.

“Seen a uptick in client demand, with buyers mostly in the five-year bucket, with bonds clearing at yesterday’s level,” he said. “Indian banks were unchanged.”

The Philippines curve was also unchanged, with spreads only a touch tighter, he said.

But Indonesia’s new deal did manage to receive attention and put in “strong performance,” another trader said.

The sovereign on Thursday priced $3 billion in two tranches of Islamic bonds due in five and 10 years with $1 billion 3.4% notes due 2022 and 4.15% notes due 2027, both pricing at par.

Deutsche Bank, HSBC, Mandiri Securities, National Bank of Abu Dhabi and Standard Chartered were the joint bookrunners and lead managers for Indonesia’s Rule 144A and Regulation S deal. Bahana Securities, Danareksa Sekuritas and Trimegah Sekuritas Indonesia were the co-managers.

“The new five-year sukuks traded to highs of 100.60 with mix of accounts adding while Middle Eastern accounts took profit,” he said. “The 10-year sukuk bonds were clearing 100.30 most of the day.”

Saudi Arabia notes trade

From the Middle East, the three-tranche issue of notes due in 2021, 2026 and 2046 from Saudi Arabia continued to attract investor interest.

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 offered after Thursday’s 97.87 bid, 98.12 offered.

The 3¼% notes due in 2026 that priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, moved to 96.93 bid, 96.98 offered after Thursday’s 96.80 bid, 96.95 offered.

And the 4½% notes due in 2046 that priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, were seen Friday at 98.05 bid, 98.15 offered after Thursday’s 98 bid, 98.15 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.

China Evergrande sells bonds

In its new deal, China Evergrande Group priced a $1 billion issue of 9½% notes due March 29, 2024 at par to yield 9½%, according to a company filing.

China Citic Bank International, China Merchants Securities (HK) and Haitong International were the joint bookrunners for the deal.

The proceeds will be used to refinance debt.

China Evergrande is a real estate development company based in Guangzhou, China.

© 2015 Prospect News.
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