EM spreads widen and selling seen; Emirates notes active; Russia's RusPetro, NLMK on deck

By Christine Van Dusen

Atlanta, Feb. 4 - Argentina's GeoPark Latin America and Ukraine made moves toward the market on Monday amid wider spreads, lower volumes and some better selling from Asian investors.

The Markit iTraxx SovX index spread started the week about 3 basis points wider while the corporate index moved out by 2 bps.

"With the 10-year Treasury at 2.05%, we have seen again better sellers from Asia and electronically," a London-based trader said. "No meaningful volume going through, but prices are again reacting lower."

Russia-based Vimpelcom and Novatek were outperformers among high-beta names, a London-based analyst said.

"Most Russian corporates [are] a little tighter in general," she said. "Turkey, likewise, is looking a little tighter."

In other trading, the $750 million issue of 4½% amortizing notes due 2025 that Dubai's Emirates Airline recently priced at 99.941 was seen Monday at 98 bid, 99 offered.

The notes were priced to yield mid-swaps plus 300 bps via Citigroup, Standard Chartered, Deutsche Bank, JPMorgan, Emirates NBD and Morgan Stanley in a Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Meanwhile, Russia's RusPetro plc set initial price talk for a five-year issue of dollar notes, Brazil's GOL Linhas Aereas Inteligentes SA planned a roadshow for a dollar deal, and Russia's OJSC Novolipetsk Steel (NLMK) mandated bookrunners.

"The time to strike may have been the back end of last year or week one of 2013," a trader said. "As with everything, it's all about timing."

RusPetro sets talk

RusPetro set initial price talk at the low- to mid-11% area for its planned five-year issue of dollar-denominated notes, a market source said.

Bank of America Merrill Lynch, Credit Suisse and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for general corporate purposes and to repay the Russian oil and gas company's term loan.

GOL plans roadshow

For its planned issue of dollar-denominated notes, Brazilian airline GOL Linhas Aereas Inteligentes is planning a roadshow for a dollar-denominated issue of notes, a market source said.

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

The roadshow begins Tuesday in New York, London and Santiago, then on Wednesday moves to Boston and the West Coast.

NLMK mandates bookrunners

Also on Monday, Russia's Novolipetsk Steel mandated Deutsche Bank, JPMorgan and Societe Generale to lead a roadshow for a dollar-denominated issue of notes, a market source said.

The roadshow will begin Wednesday in London and Boston. The marketing trip ends Thursday in London and New York.

A Rule 144A and Regulation S deal is expected to follow.

Halkbank oversubscribed

The final book for Turkey-based Turkiye Halk Bankasi's (Halkbank) $750 million issue of 3 7/8% notes due in 2020 was $3.5 billion from 211 accounts, a market source said.

The notes priced at 98.901 to yield 4.04%, or mid-swaps plus 255 bps, tighter than talk.

About 61% of the orders came from Europe and the Middle East, 30% from the United States and 9% from Asia.

Fund managers picked up 67%, insurance and pension funds 13%, private banks 11%, banks 7% and others 3%.

Commerzbank, Goldman Sachs, JPMorgan and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

ADIB notes trade up

In more trading on Monday, the recent $1 billion issue of 6 3/8% perpetual notes from Abu Dhabi Islamic Bank, which priced at par, opened at 102½ bid, 103½ offered.

Abu Dhabi Islamic Bank, HSBC, Morgan Stanley, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S-only sukuk.

Later in the morning, the notes were quoted at 102¾ bid, 103½ offered.

"ADIB perps are trying to find their feet between 102½ and 1031/2, having nearly printed 108 earlier this year," a trader said.

The notes closed near 103.

Dubai bonds dip

Dubai's recent issue of 3 7/8% notes due 2023 were trading on Monday at 98 bid, 98½ offered after pricing at par.

"The new 2023 trades well from a technical point of view," the London trader said.

The bookrunners were Dubai Islamic Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank.

"DPWorld's 2017s are now 45 bps wider on the week, despite the move on rates," he said. "Emaar Properties' 2019s are 25 bps wider."

IPIC widens

Also from the Middle East, International Petroleum Investment Co.'s 2041s are 10 bps wider on the week.

And from Ukraine, sovereign bonds have continued to tick lower, said Svitlana Rusakova of Dragon Capital.

The 2021s were quoted at 105¼ bid, 106¼ offered, while the 2022s were seen at 102¾ bid, 103¾ offered.

"Quasi-sovereign Naftogaz remained unchanged at 103.0 bid, 104.0 offered," she said.

Ukraine, GeoPark in focus

Ukraine set price talk for a tap of its 7.8% notes due 2022 at the 7¾% area, a market source said.

JPMorgan and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

And Argentina-based oil and gas exploration company GeoPark Latin America set price talk at 7¾% to 8% for its $300 million issue of notes due 2020.

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

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