Primary sees NongHyup, China Construction; Russian corporates perk up; Burgan sets talk

By Christine Van Dusen

Atlanta, Sept. 22 – Korea’s NongHyup Bank and China Construction Bank Corp. were among the issuers to print notes on Monday as bonds from the Middle East and Russia improved and other emerging markets assets weakened.

“[Emerging markets] is generally a little weaker this morning, affected by weakness in Asia, driven by comments from the Chinese Finance Minister that the government’s economic stimulus may be limited,” a London-based analyst said. “However, we are seeing better performance from Russian corporates, helped by various positive headlines over the weekend.”

He pointed to the news that the Ukraine government and pro-Russia rebels agreed to a memorandum on a peace plan, a move that should help to prolong the cease fire.

“Elsewhere in [emerging markets], Turkey credit default swaps spreads are one basis point wider,” he said. “Central and emerging Europe are largely unchanged.”

Looking to the Middle East, the relative stability in rates helped most bonds start off on solid footing on Monday, a London-based trader said.

“Demand, out of the gate,” he said. “Perpetuals were strong, up nearly a point, as some money was put to work.”

He was particularly interested in the revived deal planned by Kuwait’s Burgan Bank SAK, which on Monday set initial talk in the low- to mid-7% area for a benchmark-sized issue of dollar-denominated notes that is expected to price on Tuesday.

HSBC, Citigroup, JPMorgan and National Bank of Abu Dhabi are the bookrunners for the deal.

“Kuwaiti names can sometimes struggle from the lack of meaningful follow-through buying and, it must be noted, some periods of relative illiquidity for a variety of reasons,” the London trader said. “There is also a 25-cent private banking rebate on this one. Not a logical fit for the big books in the region, however at this yield and hopefully no greater than $500 million I suspect it will have some support.”

Meanwhile, recent new issues from the region performed fairly well, he said, with Bahrain’s 6% notes due 2044 that priced at par trading on at 102 on the bid side.

“Even the Emirates NBD perpetuals ticked a little higher, closing at par bid, 100¼,” he said.

The notes from the Dubai-based issuer recently priced at par.

NongHyup Bank does deal

Korea’s NongHyup Bank priced $300 million 2¾% notes due Sept. 29, 2019 at 99.816 to yield 2.879%, or Treasuries plus 100 bps, a market source said.

BofA Merrill Lynch, Credit Agricole, Deutsche Bank, HSBC, Mizuho Securities and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

NongHyup Bank is a Seoul, South Korea-based agricultural and commercial credit and banking services company.

China Construction sells notes

China Construction Bank Corp. sold RMB 1.3 billion 3.8% notes due Sept. 29, 2017 at par to yield 3.8%, a market source said.

ANZ, CBA and HSBC were the bookrunners for the Regulation S deal.

The issuer is based in Beijing.

Tata on roadshow

India’s Tata International Ltd. set out on Monday for a roadshow to market a perpetual issue of Singapore dollar-denominated notes, a market source said.

HSBC is the bookrunner for the Regulation S deal.

The issuer is a Mumbai-based leather and leather products company.

Katowicki plans issuance

Poland’s Katowicki Holding Weglowy SA is looking to issue euro-denominated notes sometime in late October or November, a market source said.

No other details were immediately available on Monday.

Katowicki is a coal mining company based in Katowice, Poland.

China Coal draws orders

The final book for China Coal Solution (Singapore) Pte. Ltd.’s new issue of S$180 million 7½% notes due Sept. 26, 2016 was S$2.2 billion from 36 accounts, a market source said.

The notes priced on Friday at par to yield 7½%, a market source said.

DBS was the sole bookrunner for the Regulation S deal.

Final book for South Africa

South Africa’s new issue of $500 million 3.903% notes due in 2020 drew a final book of $2.2 billion from more than 140 accounts, a market source said.

The notes priced last week at par to yield Treasuries plus 213.6 bps via BNP Paribas, KFH Investment and Standard Bank in a Rule 144A and Regulation S deal.

About 59% of the orders came from the Middle East, 25% from Europe, 8% from the United States and 8% from others.

Banks picked up 49%, asset managers 24%, central banks 14%, hedge funds 10% and others 3%.

ICBC deal oversubscribed

A total of about RMB 7.3 billion orders came in for the new three-tranche issue of RMB 4 billion notes issued last week by Industrial and Commercial Bank of China Ltd.’s Singapore Branch, a market source said.

The deal included RMB 2 billion notes due 2016 that came to the market at par to yield 3½%.

The RMB 700 million notes due 2019 came to the market at par to yield 3.7%.

And the RMB 1.3 billion 3.95% notes due 2021 priced at par to yield 3.95%.

SinoPac Securities arranged the deal.

Brazilian airline sells bonds

On Thursday, Brazil’s Gol Linhas Aereas Inteligentes SA sold $325 million 8 7/8% notes due Jan. 24, 2022 at 98.706 to yield 9 1/8%, a market source said.

BB Securities, Bradesco BBI, Citigroup, Morgan Stanley and Santander were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund a tender offer and for general corporate purposes.

The airline company is based in Sao Paulo.

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