National Bank of Abu Dhabi prices notes; BBK launches issue; investors await Fed remarks

By Christine Van Dusen

Atlanta, March 17 – National Bank of Abu Dhabi PJSC sold notes on Tuesday as investors awaited the results of the Federal Reserve meeting, which ends on Wednesday.

“The Fed meeting, and the market’s expectations of the possible removal of patience language and the reaction from asset classes, is the next market mover,” a New York-based trader said. “We need the Fed to help soothe emerging markets, as they have taken the brunt of the oil weakness, dollar strength and illiquid markets very hard last few weeks.”

Meanwhile, a defensive tone remained in effect on Tuesday for the Asian bond market, with high-grade paper closing unchanged to 3 basis points wider, a London-based trader said.

“Mixed performance on recent issues, with (Industrial and Commercial Bank of China Ltd.)’s 2020s holding unchanged,” he said.

The 3¼% notes due March 17, 2020 priced at 98.957 to yield Treasuries plus 190 bps, following talk in the 225 bps area, via Citigroup, ICBC Asia, ICBC International, JPMorgan, Morgan Stanley and Standard Bank in a Regulation S deal.

Oil companies from China were between 1 bp and 3 bps wider on Tuesday, he said.

Chinese property companies were unchanged to ¼ point lower on Tuesday, the trader said.

In that sector, China’s Evergrande Real Estate Group Ltd. received some attention after rumors spread that the company had failed to repay a loan to an onshore construction company. That pushed the company’s bonds down about one point, he said.

And high-yield sovereign names were higher and about 1 bp to 3 bps tighter in spread, he said.

“The Philippines long end closed unchanged to ¼ point higher while the Indonesia curve bounced back to close ½ point to ¾ point higher,” he said.

Petronas widens

The new four-tranche issue of notes from Malaysia’s Petroliam Nasional Bhd. (Petronas) widened on Tuesday, the trader said.

The deal included $1.25 billion 2.707% Islamic bonds due in 2020 that priced at par to yield Treasuries plus 110 bps. On Tuesday the notes were spotted at 121 bps.

The 3½% notes due 2025 that priced at 99.125 to yield Treasuries plus 150 bps moved on Tuesday at 164 bps.

And the $1.5 billion 4½% notes due in 2045 priced at 98.767 to yield Treasuries plus 190 bps traded between 202 bps and 205 bps, he said.

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

Lat-Am improves

Looking to Latin America, bonds improved late in the session after widening earlier on Tuesday, a New York-based trader said.

Venezuela and PDVSA closed near lows, he said.

“The improved tone this afternoon – not sure the origin, but it helped, as the market was seemingly on the brink of possibly entering a liquidity meltdown,” he said. “Prices were tough to find for many assets, at times, just as hard as it was to find offers on bonds back in late January.”

European names lag

From Central and emerging Europe, high-yield names continued to lag, another London-based trader said.

“The disappointment from Moody’s not to at least change Hungary’s outlook to positive is weighing heavily on the market,” he said. “But, in my opinion, the fundamentals have changed for the better, so I do expect this to change in the near future.”

Standard & Poor’s will make its decision on March 20, he said.

Meanwhile, demand was seen for dollar bonds from Latvia and Lithuania, which have underperformed versus Poland so far this week, he said.

NBAD sells notes

National Bank of Abu Dhabi priced an RMB 200 million issue of 4.79% notes due March 17, 2020 at par to yield 4.79%, according to a company filing.

Deutsche Bank was the bookrunner for the deal.

The notes include a change-of-control put at par.

Other details were not immediately available on Tuesday.

BBK launches bonds

Bahrain’s BBK BSC launched a $400 million issue of five-year notes at mid-swaps plus 200 bps, following talk in the 200-bps area, a market source said.

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

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

Roadshow for emirate

The Emirate of Ras al Khaimah will set out on Thursday for a roadshow to market an issue of Islamic bonds, a market source said.

Al Hilal Bank, Citigroup, JPMorgan and National Bank of Abu Dhabi are the bookrunners for the Regulation S deal.

The roadshow will end on Monday.

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