MOL, Ukraine, PKO Bank, Novolipetsk, Alfa Bank print deals; Grupo Aval, Fantasia on deck

By Christine Van Dusen

Atlanta, Sept. 19 - MOL Hungarian Oil and Gas plc, Ukraine, Poland's Powszechna Kasa Oszczednosci Bank Polski SA (PKO Bank) and two Russian issuers - Novolipetsk Steel (NLMK) and Alfa Bank - priced deals on a busy Wednesday for emerging markets assets.

Notes are also expected soon from Colombia's Grupo Aval Acciones y Valores SA and China's Fantasia Holdings Group Co.

"There really is something for everyone at the moment," a trader said.

In trading, investors were particularly interested in bonds from Angola, Nigeria's Access Bank, Abu Dhabi-based International Petroleum Investment Co. (IPIC) and Dolphin Energy, Bahrain and Ukraine's Oschadbank.

"Some lower-beta credits are slightly struggling, spread-wise, into the close," a London-based trader said.

In its new deal, PKO Bank subsidiary PKO Finance priced a $1 billion issue of 4.63% loan participation notes due Sept. 26, 2022 at par to yield 4.63%, or Treasuries plus 285 basis points, a market source said.

JPMorgan and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S deal.

Hungary's MOL printed a $500 million issue of 6¼% notes due Sept. 26, 2019 at 98.954 to yield 6.438%, or mid-swaps plus 515 bps via Citigroup and HSBC in a Regulation S deal.

The notes were talked at a spread in the mid-swaps plus 525 bps area.

Wednesday also saw Russian commercial lender Alfa Bank sell $750 million 7½% notes due Sept. 26, 2019 at par to yield 7½%, a market source said.

The notes were talked at a yield in the high-7% area.

Credit Suisse and UBS were the bookrunners for the Rule 144A and Regulation S deal.

NLMK does deal

Russian steel company NLMK priced $500 million 4.95% notes due Sept. 26, 2019 at par to yield 4.95%, or Treasuries plus 377.9 bps, a market source said.

The Rule 144A and Regulation S notes - via Deutsche Bank, JPMorgan and Societe Generale - were talked at a yield in the 5 3/8% area.

Proceeds will be used to repay short-term debt and extend the company's debt maturity profile.

In the gray market the notes moved up 50 cents, flat to the reoffer bid, even though the company gave no hint as to the deal's size, a trader said.

"This long-awaited debut issue by the only investment-grade Russian steel operator will be met with a good appetite," a London-based analyst said. "Although historically the company has shown consistently stronger fundamentals than its peers, this has now changed due to a peak in its capital expenditures in 2011. However, its investment-grade status and commitment to remain such, its deleveraging story, and decelerating capital investments going forward are likely to be supportive of the new issue."

Ukraine prices notes

Ukraine priced a $600 million tap of its 9¼% senior notes due July 24, 2017 (B2/B+/B) at 107.125 to yield 7.461%, or Treasuries plus 677.8 bps, a market source said.

The notes priced close to talk, set at 7.46%.

JPMorgan, Morgan Stanley, Sberbank CIB and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

The original issue totaled $2 billion and priced at par on July 17 to yield Treasuries plus 863 bps.

This was the sovereign's largest eurobond, according to a statement from the Ukraine Ministry of Finance.

Grupo Aval, Fantasia ahead

In other deal-related news, Grupo Aval is planning a benchmark-sized issue of dollar-denominated notes due in 2022, a market source said.

Goldman Sachs and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

And Chinese property development company Fantasia Holdings mandated Bank of America Merrill Lynch, UBS and ICBC for an issue of senior notes, according to a company filing.

Proceeds from the Regulation S notes will be used to fund existing and new property projects, to refinance existing indebtedness and for general corporate purposes.

Market-watchers were whispering about the possibility of new paper from Qatar Islamic Bank.

"However, aside from this, there's no confirmed supply, although parts of the market trade a little strangely to me, so perhaps something is cooking," the London trader said.

Middle East sees demand

Demand was noted on Wednesday for IPIC, Abu Dhabi National Energy Co. (TAQA) and Mubadala as U.S. Treasuries moved higher, a trader said.

Jebel Ali Free Zone (Jafza) and Emaar Properties saw two-way activity.

"Meanwhile, bank paper continues to be rock-solid," he said. "There's very good demand for any 2012 to 2014 paper in the Gulf region at the moment."

Bahrain's notes popular

Also from the Middle East, Bahrain continued to trade well, with its 2022s unchanged at 106.50 bid, 107 offered.

Dolphin Energy's 2021s were seen at 115.75 bid, 116.50 offered.

"Dolphin's 2021s still have some big fans," a trader said.

And Dubai Electricity and Water Authority (DEWA)'s 2020s were trading at 118 bid, 118.50 offered, about five bps wider on the day and 10 bps on the week but 65 bps tighter on the month, he said.

"Mubadala, [TAQA and IPIC 2022s] are all lifted as the 10-year moves up," he said.

Senegal, Zambia active

From Africa, Senegal remained in focus, a trader said.

"Senegal was hit and then bid through the trade almost immediately," he said. "It, Gabon and Ghana are trading well and not ones to short."

The recent issue of notes from Zambia that priced last week at 98.108 was quoted Wednesday at 101.60 bid, 101.85 offered after doing the majority of its trades between 101.62 and 101.75.

"Angola is moving at a decent clip, and went through 108.875 this afternoon," he said. "A decent amount of Angola went through today in the high 108s."

The notes, due 2019, recently priced at par.

Nigerian banks hold in

Some paper was floating around for Nigeria's GTB Finance BV, a trader said.

"Access Bank is still holding in nicely," he said. "And a few people highlighting Tunisia's 2020s."

Bonds from South Africa had a choppy session on Wednesday, with Street sellers seen, a trader said.

"Five-year credit default swaps close a touch wider," he said.

Egypt, meanwhile, finished off a decent run, he said.

Turkey ends day 'soggy'

In other trading, the new $1.5 billion issue of 2.803% notes due March 26, 2018 from Turkey that priced at par on Tuesday were active in trading on Wednesday.

The Rule 144A and Regulation S deal - via Citigroup, HSBC and Kuwait Liquidity House - is the country's first issue of Islamic bonds.

The notes opened on Wednesday at 99.90 bid, 100.10 offered. Buyers began to emerge as the morning went on, and the notes were seen at 100.05 bid, 100.20 offered.

They then moved steadily lower, dropping to 99.95 bid, 100.08 offered by the early afternoon in Europe.

Nearing the end of the session, the notes moved as low as 99.78 bid, 100.93 offered.

"A little soggy as the day wore on," a trader said.

Ukraine notes drift lower

From Ukraine, bonds have drifted a bit lower this week, with the sovereign's 2017s seen at 108 bid, 109 offered and its 2020s near 101.50 bid, 102.50 offered, said Svitlana Rusakova of Dragon Capital.

Oschadbank remained well supported after moving about a half-point higher in trading on Tuesday. Metinvest's 2015s, however, were seen inching lower to about 102.75 bid, 103.75 offered.

"The Governor of the Czech Central Bank stunned markets yesterday with bond yields dropping by 17 bps on the [Czech Republic's] 3.85% 2021 ... following his remarks with regard to future potential stimulative measures," according to a report from Erste Group Research. "Markets took his comments as an indication that the central bank may target a weaker [Czech koruna] to bolster growth prospects as the positive effect of cutting rates wanes."

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