Mexico's Conmex to issue bonds; spreads tighten; Turkish bonds eyed; Ukraine notes dip

By Christine Van Dusen

Atlanta, Dec. 10 - Mexico's Concesionaria Mexiquense SA de CV (Conmex) was among the few emerging markets issuers to take steps on Tuesday toward issuing bonds on a busy trading day with tighter spreads for the asset class.

The Markit iTraxx SovX CEEME ex-EU index spread on Tuesday moved to 315 basis points over Treasuries, 9 bps narrower than on Monday. The corporate index spread - seen Monday at 260 bps over Treasuries - tightened 6 bps to 254 bps on Tuesday.

"A relatively strong open in Central and emerging Europe, the Middle East and Asia this morning," a London-based analyst said.

This was particularly true for Turkey, which reported that its third-quarter gross domestic product numbers came in above consensus.

"Turkish sovereign cash is 1 bp to 5 bps tighter on average," she said.

Among Turkish corporates, lender Turkiye Is Bankasi AS (Isbank) saw its recent issue of 7.85% notes due Dec. 10, 2023 perform well, she said.

The notes priced at par to yield 7.85% via BNP Paribas, Commerzbank, JPMorgan, Morgan Stanley and Standard Chartered Bank in a Rule 144A and Regulation S deal.

"Still offering value to the curve," the analyst said.

Ukraine remained in focus on Tuesday, a trader said.

"Reports yesterday stated there had been clashes between police and protestors and that the opposition party headquarters had been raided," she said.

In response, sovereign bonds traded slightly lower on Tuesday, with the 2014s spotted near 95.

Several names from the Middle East were "well supported," a trader said, including Dubai Holding's 2017s.

"Solid tone and decently active," he said.

MAF sees buyers

Dubai-based Majid Al Futtaim Holdings LLC (MAF) saw buyers for its 7 1/8% notes. The $500 million issue of perpetual notes priced at par with BofA Merrill Lynch, Emirates NBC, Goldman Sachs, HSBC, JPMorgan and Standard Chartered Bank in a Regulation S deal.

On Tuesday the notes were seen at 100.37 bid, 100.62 offered.

"But overall the region is lagging Treasuries," another trader said.

Russian bonds strengthen

Bonds from Russia have showed some strengthening so far this week, according to a report from UFS Investment Co.

The spread for the sovereign's 2030 bonds against the 10-year Treasury has narrowed by about 6 bps, the report said.

Volatility was expected to increase throughout the session on Tuesday, following remarks from European Central Bank President Mario Draghi, who pushed for completing a banking union and structural reforms.

TAQA active

One trader was keeping his eye on Abu Dhabi National Energy Co. PJSC (TAQA), which on Monday was seeking bookrunners for a possible issue of notes.

The company's 2021s and 2023s were active in trading on Tuesday, he said.

"There is some price action lately on the 2021s and 2023s, with the latter going through now at 93.50, unchanged on the month, spread-wise," he said.

The recent issue of perpetual notes from GEMS MEA Sukuk Ltd. also traded well on Tuesday, he said, as did International Petroleum Investment Co.'s bonds.

"Trades like a rock, especially the front dates," he said.

Aldar ticks down

The recent issue of notes from Abu Dhabi-based Aldar Properties PJSC - $750 million 4.348% notes due Dec. 3, 2018 that priced at par - traded Tuesday at 100½ bid, 100¾ offered, a London-based trader said.

Last week the notes were spotted at 100.93 bid, 101.18 offered.

Standard Chartered Bank, Dubai Islamic Bank, First Gulf Bank, Goldman Sachs and National Bank of Abu Dhabi were the bookrunners for the Regulation S deal.

Conmex seeks to issue notes

Mexico's Conmex is looking to issue international bonds in a Rule 144A and Regulation S deal, a market source said.

No other details were immediately available on Tuesday.

The issuer, part of OHL Mexico, is leading the design, finance, building and operation of sections of the Mexico City Ring Road Circuito Exterior Mexiquense. The road links the main access roads to the capital.

YPF deal ahead

Another trader was looking ahead to the planned issue of up to $300 million of notes from Argentina's Yacimientos Petroliferos Fiscales (YPF).

The notes are expected to price next week.

YPF is a petroleum and natural gas company based in Buenos Aires.

"There are two more real days of liquidity this week and then perhaps a couple next week, and that's really it," he said. "The market is not expecting any more supply of any meaningful size until January."

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