Yapi Kredi, Fantasia Holdings, Gazprombank sell bonds; tone 'steady' for EM assets

By Christine Van Dusen

Atlanta, Jan. 15 - Turkey's Yapi ve Kredi Bankasi AS, China's Fantasia Holdings Group Co. Ltd. and Russia's Gazprombank OJSC printed bonds on a less-hectic but still mostly positive Tuesday for emerging markets assets.

The day also saw several issuers planning or advancing deals, including Czech Republic-focused New World Resources plc, Marfrig Holdings (Europe) BV, Brazil's Tonon Bioenergia SA, China's KWG Property Holding Ltd., Hong Kong's Powerlong Real Estate Holdings Ltd., Korea Development Bank, Slovenia and Russia's OJSC Gazprom.

"Steady tone overall," a London-based trader said.

In trading, Russia and Turkey saw their sovereign bonds move up with U.S. Treasury prices while some nibbling was seen for Middle Eastern credits Emaar Holdings and Dubai Holding.

"The latter was sold yesterday in the Street but seems well supported today," a trader said.

The recent perpetual notes from Abu Dhabi Islamic Bank saw some two-way activity between 106½ and 106.80, he said.

"That's about a point off the all-time high," he said.

Abu Dhabi National Energy Co.'s (TAQA) 2023s were wider by 12 basis points while the International Petroleum Investment Co. curve was steady.

"The 2041 is slightly better offered," he said. "The 2020s and 2022s are 28 bps tighter on the month."

Saudi Electricity Co.'s 2022s held at 109 on Tuesday, about 18 bps tighter on the week.

"Aldar Properties can't seem to muster much of a push through the 110 level," a trader said. "Emirates Airline 2016s traded a few times at 107 but holds there."

Sovereign paper from Dubai flattened a bit on Tuesday, particularly among the 2014s, 2015s and 2017s. But little selling was reported for the country's 2020s, 2021s and 2022s, a trader said.

"The 2021s were trading at the mid- to high-112s in cash price," he said.

DEWA pauses

Dubai Electricity and Water Authority's 2020s were quoted Tuesday at 125½ bid, 125¾ offered.

"It seems to maybe be pausing here," a trader said, noting that the bonds have moved 40 bps tighter over the month.

Meanwhile, Investcorp SA completed the sale of CCC Information Services Inc. to Leonard Green & Partners, providing Investcorp with $550 million in proceeds.

"Investcorp is popular," the trader said.

And bonds from Kuwait and its corporates remained attractive and saw "bids aplenty," he said.

"Lebanon is pausing for breath after a pretty active start to the year," he said. "Still lagging peer group."

Ukraine notes dip

In other trading on Tuesday, sovereign bonds from Ukraine moved slightly lower on light volumes, said Svitlana Rusakova of Dragon Capital.

The 2017s were quoted at 108¾ bid, 109¾ offered while the 2022s were seen at 101¼ bid, 102¼ offered.

"News of Ukreximbank's upcoming eurobond issuance did not affect its outstanding bonds, with Ukreximbank 15s remaining quoted at 99½ bid, 101 offered," she said. "Other corporate names were mostly quiet, with demand for higher-yielding paper."

This came against the backdrop of a wider trade deficit for the sovereign in November.

"Exports of commodities took a hit, with demand for metal products bearing the brunt of a global reduction in manufacturing activity," the London analyst said. "This should put downward pressure on the hryvnia before Ukrainian officials and the IMF team meet in a couple of weeks to decide on a loan package."

Yapi Kredi prices notes

In its new deal, Turkey-based lender Yapi Kredi priced $500 million 4% notes due Jan. 22, 2020 at 99.529 to yield mid-swaps plus 273 bps.

The notes priced tighter than initial talk, set in the mid-swaps plus 290 bps area.

Bank of America Merrill Lynch, Mitsubishi UFJ Securities, Morgan Stanley and UniCredit were the bookrunners for the Rule 144A and Regulation S deal.

The notes moved 5 bps tighter in early trading on Tuesday, a London-based analyst said.

"The 'no-grow' $500 million size and some investment-grade account involvement has led this to trade better," she said. "At some stage the bond will be ripe to tap, when approvals are granted, but for now it looks well placed."

Fantasia, Gazprombank do deals

The primary market also saw China-based property developer Fantasia Holdings sell a $250 million issue of 10¾% notes due on Jan. 22, 2020 at par to yield 10¾%, a market source said.

Bank of America Merrill Lynch and Citigroup were the bookrunners for the Regulation S deal.

The proceeds will be used to refinance existing indebtedness, to finance new and existing property development projects and for other general corporate purposes, according to a company filing.

And Russian lender Gazprombank priced a RUB 20 billion issue of 7 7/8% notes due July 25, 2016 at par to yield 7 7/8%.

Barclays, Citigroup and GPB Financial Services Ltd. were the bookrunners for the Regulation S transaction.

New World sets talk

Czech Republic-focused New World Resources talked its €275 million issue of eight-year notes to yield 8% to 8¼%, market sources said on Tuesday.

The books close on Wednesday and the deal is set to price thereafter.

Citigroup, Morgan Stanley, Goldman Sachs and Erste Bank are managing the sale.

The proceeds will be used to repay the company's existing 2015 notes.

New World Resources is an Amsterdam-based central European coal producer with operations in the Czech Republic.

Marfrig gives guidance

Marfrig Holdings (Europe) BV has set talk at the 10¼% area for benchmark-sized issue of dollar-denominated notes due in July 2017.

Bank of America Merrill Lynch, Bradesco BBI, BB Securities and Itau BBA are the bookrunners for the Rule 144A and Regulation S deal.

The notes are expected to price mid-week.

The proceeds will be used to extend the company's debt maturity profile and for general corporate purposes.

The notes are guaranteed by Marfrig Alimentos SA, a food processing company based in Sao Paulo, Brazil.

Talk from Tonon

Also from Brazil, sugar and ethanol producer Tonon Bioenergia set initial price talk in the high-9% area for its planned 200 million issue of notes due in January 2020, a market source said.

BTG Pactual, Itau BBA and Santander are the bookrunners for the Rule 144A and Regulation S deal.

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

And China-based KWG Property is planning a dollar-denominated issue of perpetual notes, according to a company filing.

Citigroup, Goldman Sachs, HSBC, ICBC, Standard Chartered Bank and UBS are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance existing debt and finance existing and new projects.

Deal ahead for Powerlong

Hong Kong's Powerlong Real Estate Holdings is planning an issue of notes with bookrunners Deutsche Bank, HSBC and RBS, according to a company filing.

Proceeds from the Regulation S deal will be used to refinance existing indebtedness.

And Korea Development Bank is planning a two-tranche issue of dollar notes, according to a company filing with the Securities and Exchange Commission.

Barclays, Bank of America Merrill Lynch, Daiwa Capital Markets, Goldman Sachs, HSBC, KDB Asia and UBS Investment Bank are the bookrunners for the SEC-registered deal.

The proceeds will be used for general operations, including extending foreign currency loans, repayment of maturing debt and other obligations.

Slovenia seeks issuance

In other deal-related news, Slovenia is seeking to issue up to $4 billion of dollar and euro bonds in 2013, a market source said.

The proceeds will be used to repay maturing debt, for budget financing and for the recapitalization of the country's banking sector.

And Russian energy company Gazprom is planning an issue of bonds with bookrunners BNP Paribas and JPMorgan, a market source said.

Paul A. Harris contributed to this article.

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