Israel, Greentown China, Lithuania, ICTSI, Korea Southern issue notes; EM spreads mostly flat

By Christine Van Dusen

Atlanta, Jan. 28 - Israel, Greentown China Holdings Ltd., Lithuania, Philippines-based International Container Terminal Services Inc. and Korea Southern Power Co. Ltd. priced notes on a weaker but balanced day for emerging markets bonds.

"Very interesting and, at times, challenging day," a London-based trader said. "Lower-beta names have again been leaned on in the market."

The Markit iTraxx SovX index spread started the week unchanged, as did the corporate index.

"It was clear the Street saw much better sellers looking at the broker trades going through," a trader said.

Most names saw two-way flows, with particular demand noted for Qatar Telecom QSC, Bahrain and the Qatar sovereign, a London-based analyst said.

"Russian corporates are generally a little wider, but the new Credit Bank of Moscow is trading tighter," she said.

From Ukraine, sovereign bonds moved a touch lower on Monday, said Svitlana Rusakova of Dragon Capital.

The 2017s were seen at 110.25 bid, 111.25 offered while the 2022s traded at 102.75 bid, 103.75 offered.

Corporate names have remained somewhat quiet, she said.

In trading from the Middle East, bonds from Jafza Holding and Emaar Properties were well offered while Majid al-Futtaim Holdings' bonds moved lower.

"These bonds are generally two to three points off the highs, but we're still seeing real money happy to add in this weakness," the London trader said.

Meanwhile, several issuers made plans to bring new deals to the market, including notes from Lithuania's Bite Finance International BV, India's Reliance Industries, Russia's OAO Novatek and Russia's PhosAgro.

Dubai in demand

In more trading from the Middle East, the recent issue of notes from Dubai remained in focus on Monday. The sovereign priced $1.25 billion notes due in 10 and 30 years in a Regulation S deal.

The 10-year tranche totaled $750 million 3 7/8% Islamic bonds that priced at par to yield 3 7/8%. The bookrunners were Dubai Islamic Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank.

"The 2023s had a huge book, with people clambering over themselves for bonds," he said. "They opened bid at 100.875 versus a launch of par."

The 30-year tranche - $500 million 5¼% conventional notes - priced at 98.148 to yield 5 3/8% and was seen at 98 bid, 98 5/8 offered on Monday.

Emirates NDB Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank managed the transaction.

Israel prints bonds

In its new deal, Israel priced a two-tranche issue of $2 billion notes due in 2023 and 2043 in a Securities and Exchange Commission-registered transaction, a market source said.

The deal included $1 billion 3½% notes due June 30, 2023 that priced at 99.448 to yield Treasuries plus 125 basis points. The notes were talked at the Treasuries plus 135 bps area.

The second tranche totaled $1 billion 4½% notes due Jan. 30, 2043 that priced at 98.574 to yield Treasuries plus 145 bps. The notes were talked at the Treasuries plus 155 bps area.

Barclays, Citigroup and Goldman Sachs were the bookrunners for the transaction.

The proceeds will be used for general governmental purposes.

Greentown prices notes

The primary market also saw property developer Greentown China Holdings print a $400 million issue of 8½% senior notes due Feb. 4, 2018 at par to yield 8½%, a market source said.

Deutsche Bank, Bank of China, Goldman Sachs, HSBC, ICBC (Asia), Standard Chartered Bank and UBS were the bookrunners for the Regulation S offering.

The proceeds will be used to refinance debt and for general corporate purposes.

Lithuania sells bonds

Lithuania priced a €400 million increase of its 4.85% notes due Feb. 7, 2018 at 110.27 to yield 2.631%, or mid-swaps plus 140 bps, in line with talk.

Barclays and Citigroup were the bookrunners for the Regulation S deal.

Proceeds from the offering will be used for general budgetary purposes, including the refinancing of existing debt obligations.

ICTSI does deal

In another new deal, Philippines-based port operator ICTSI priced a $100 million increase of its 4 5/8% notes due Jan. 16, 2023 at 101.23 to yield 4.46%, a market source said.

UBS was the bookrunner for the Regulation S deal.

The original $300 million issue priced earlier this month at 99.014 to yield 4¾%.

And Korea Southern Power, part of the largest electric utility in South Korea, priced a $300 million issue of 1 7/8% notes due Feb. 5, 2018 at 99.229 to yield Treasuries plus 115 bps.

Barclays, Citigroup, Deutsche Bank and RBS were the bookrunners for the Regulation S deal.

Bite Finance on roadshow

In deal-related news, Bite Finance is on a roadshow for a €200 million issue of five-year notes, a market source said.

DNB Markets and Swedbank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow began Monday in London and will conclude Wednesday in Paris and Frankfurt.

The proceeds will be used to redeem or retire notes due in 2014 and 2017, to repay outstanding debt and to pay other fees and expenses.

Bite Finance provides mobile telecom and Internet services for customers in Lithuania and Latvia.

Reliance Industries sets talk

Also on Monday, India-based petrochemical and retail conglomerate Reliance Industries set initial price talk at the 6% area for its planned issue of dollar-denominated perpetual senior notes.

Bank of America Merrill Lynch, Citigroup, HSBC, Barclays, Deutsche Bank, JPMorgan and RBS are the bookrunners for the Rule 144A and Regulation S deal.

Novatek, PhosAgro tap leads

Russian gas producer Novatek has picked Barclays, Gazprombank, Goldman Sachs and Sberbank to arrange a roadshow for a ruble-denominated issue of notes, a market source said.

The roadshow for the Rule 144A and Regulation S deal will be held in London and New York.

In other deal news from Russia, fertilizer and phosphates company Russia's PhosAgro has mandated Citigroup, Raiffeisen Bank, Sberbank and VTB Capital for up to $500 million of notes, a market source said.

No other details were immediately available on Monday.

China SCE oversubscribed

The final book for China SCE Property Holding Ltd.'s recent $150 million add-on to its 11½% notes due Nov. 14, 2017 was $800 million from 50 accounts, a market source said.

The notes priced at 108 to yield 9.381% via Deutsche Bank, HSBC and ICBC International Securities Ltd. in a Regulation S deal.

Fund managers picked up 80% of the orders while banks accounted for 15% and private banks 5%.

The original $200 million issue priced in November at par to yield 11½%.

Proceeds will be used to finance new and existing projects and for general corporate purposes.

China CRE attracts orders

Also oversubscribed was the recent issue of $200 million 8% notes due Jan. 28, 2020 from Hong Kong-based Central China Real Estate Ltd., which priced at par.

HSBC, JPMorgan, Morgan Stanley and UBS were the bookrunners for the Regulation S deal.

The final book was $2 billion from 118 accounts, with 66% from fund managers, 32% from private banks and 2% from banks.

The proceeds will be used to finance new and existing property projects, to repay debt and for general corporate purposes.

Powerlong popular

In another popular deal from Asia, China's Powerlong Real Estate Holding Ltd. saw its recent $250 million issue of 11¼% notes due Jan. 25, 2018 attract about $1.8 billion from 120 accounts, a market source said.

About 84% of the orders came from Asia and 16% from Europe.

Fund managers accounted for 47%, private banks 37%, banks 14% and others 2%.

The notes priced at 98.608 to yield 11 5/8% with bookrunners Bank of America Merrill Lynch, Deutsche Bank, HSBC and RBS in a Regulation S deal.

Proceeds will be used to refinance existing debt.

Tata draws big book

India-based Tata Communications' S$250 million issue of notes due in 2016 attracted an order book of S$3.5 billion from more than 90 accounts, a market source said.

The notes priced with a 4¼% coupon at par to yield 4¼%. ANZ, DBS, RBS and Standard Chartered Bank were the bookrunners for the Regulation S deal.

About 88% of the orders came from Singapore, 10% from Asia and 2% from Europe.

Private banks picked up 37%, fund managers and corporates 33% and banks 30%.

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