Zoomlion prices bonds; new Qtel notes active in trading; tone 'solid' for EM on FOMC news

By Christine Van Dusen

Atlanta, Dec. 13 - China's Zoomlion Heavy Industry Science and Technology Co. Ltd. priced notes on Thursday as emerging markets bonds performed well on the news that the Federal Open Market Committee will morph Operation Twist into a plan to purchase long-term government bonds.

"Solid tone and good spread performance today," a trader said.

The FOMC's move is expected to encourage investors to move into riskier assets.

"Spreads obviously performed well today with the US Treasuries leaking lower again," he said. "The technical backdrop remains very solid and many bonds remain tricky for sourcing and covering."

Much of the day's emerging markets trading focused on the recent new issue of notes from Qatar Telecom QSC (Qtel).

"Active day, headlined by Qtel's return to the markets," a London-based trader said. "Impressive effort."

Through subsidiary Qtel International Finance Ltd., the telecom company priced $1 billion 3¼% notes due Feb. 21, 2023 at 98.721 to yield 3.399%, or Treasuries plus 175 basis points.

The notes opened at 99.80 bid, 100.05 offered, then moved to 100.10 bid, 100¼ offered, a trader said.

Later the notes were quoted at par bid, 100 1/8 offered.

Barclays, HSBC, Mitsubishi UFJ, Mizuho Securities, Morgan Stanley and QNB Capital were the bookrunners for the Rule 144A and Regulation S transaction.

Other recent issues - including the new notes from Abu Dhabi-based International Petroleum Investment Co. (IPIC), Abu Dhabi National Energy Co.'s (TAQA), Morocco and Abu Dhabi-based Union National Bank PJSC - stood out in the secondary market on what was likely one of the last active days of trading.

"Meaning volume and liquidity days - one can probably count them on one hand," a trader said.

Zoomlion sells notes

In its new deal, heavy machinery manufacturer Zoomlion priced a $600 million issue of 6 1/8% notes due Dec. 20, 2022 at 99.08 to yield 6¼%, according to a company filing.

Goldman Sachs was the bookrunner for the Rule 144A and Regulation S transaction.

The proceeds will be used to fund the group's overseas expansion plan, including enhancing the distribution and service network and establishing research and development centers and manufacturing facilities.

Davivienda plans notes

In deal-related news, Colombian lender Banco Davivienda SA is planning an issue of $300 million of international bonds.

No other details were immediately available on Thursday.

Also on Thursday, market sources were speculating that Vietnam-based real estate company Vingroup JSC may not go forward with its planned five-year dollar notes via Credit Suisse and Citigroup.

The Rule 144A and Regulation S notes could be canceled or pushed into 2013.

And sources were whispering about OJSC Russian Agricultural Bank, which is expected to consider new issuance when its board convenes later this month.

IPIC in focus

On the secondary side, IPIC's notes due in 2018 and 2023 received some attention on Thursday.

The €800 million of 2 3/8% notes due May 30, 2018 that priced at 99.583 to yield 2.459%, or mid-swaps plus 145 bps, were bid at z-spread plus 113 bps on Thursday.

The €850 million 3 5/8% notes due May 30, 2023, which priced at 99.021 to yield 3.742%, or mid-swaps plus 195 bps, were bid Thursday at z-spread plus 173 bps.

"Parts of the IPIC curve are virtually bid-only," a London-based trader said.

BNP Paribas, JPMorgan, National Bank of Abu Dhabi, Natixis, RBS and Unicredit were the bookrunners for the Regulation S-only deal.

TAQA notes 'popular'

Abu Dhabi-based TAQA's recent two-tranche issue of $2 billion notes due Jan. 12, 2018 and 2023 also made some moves in trading on Thursday.

The Rule 144A and Regulation S deal included $750 million 2½% notes due 2018 that priced at 99.483 to yield Treasuries plus 200 bps. On Thursday they were bid at Treasuries plus 175 bps.

The second tranche of $1.25 billion 3 5/8% notes due 2023 that priced at 99.404 to yield 210 bps over Treasuries were seen on Thursday bid at Treasuries plus 180 bps.

"Very popular today," a trader said of the 2023s.

BNP Paribas, Citigroup, HSBC and Standard Chartered were the bookrunners for the deal.

Morocco notes trade up

Morocco's new 4¼% 10-year notes that priced at 99.228 were seen Thursday at 99½ bid, 99.70 offered after Tuesday's levels of 99.27 bid, 99.47 offered.

The sovereign's 5½% 30-year bonds that priced at 97.464 traded Thursday at 98 bid, 99 offered. On Tuesday the notes were seen at 97½ bid, 98¼ offered.

Barclays, BNP Paribas, Natixis and Citigroup were bookrunners for the Rule 144A and Regulation S deal.

UNB deal a 'success'

Abu Dhabi-based Union National Bank's new $250 million increase of its existing 3 7/8% notes due Nov.10, 2016 was a success, a trader said.

The notes priced at 104.499 to yield 2.65%, a market source said. On Thursday, they closed at 104¾ bid, 105½ offered.

Citigroup, Deutsche Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered were the bookrunners for the Regulation S-only transaction.

"I say that might be it, supply-wise, from the region for the time being," he said.

Ukraine bonds move higher

From Ukraine, bonds have been moving higher on lower volumes, said Svitlana Rusakova of Dragon Capital.

The long end of the curve moved as much as a 1/2-point higher, with the sovereign's 2017s seen at 107¼ bid, 108¼ offered. The 2022s were quoted at par bid, 101 offered.

"Corporate names were mixed," she said.

Some demand was noted for Oschadbank's bonds at 94¾ bid, 95¾ offered and Mriya Agro Holdings at 99½ bid, 101 offered, she said.

And bonds from City of Kiev faced selling pressure and moved lower.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.