Russia's NLMK prices on quieter session for EM; ADCB, RenCredit, Bank of India deals ahead

By Christine Van Dusen

Atlanta, Feb. 11 - Russia's OJSC Novolipetsk Steel (NLMK) priced notes on a quieter Monday for emerging markets assets, as Asian holidays thinned volumes and some issuers, including Brazil's Schahin Oil & Gas Ltd., backed away from the primary market.

"Quiet start so far, with most of Asia out on holidays. Retail two-way on the usual suspects so far," a London-based trader said. "Lackluster session."

In its new deal, NLMK sold $800 million 4.45% notes due 2018 at par to yield 4.45%, following talk of 4 5/8% to 4¾%.

Deutsche Bank, JPMorgan and Societe Generale were the bookrunners for the Rule 144A and Regulation S deal.

A handful of other corporate names took steps toward pricing new deals, including Abu Dhabi Commercial Bank (ADCB), Russia's Renaissance Credit Group (RenCredit), Bank of India and Russia's Lenta Ltd.

In trading on Monday, Russian and Turkish corporates continued to experience a better tone, a London-based analyst said. "The Middle East and North Africa are opening unchanged."

Sovereign paper from South Africa was somewhat wider on Monday, a trader said.

"Not much of Africa sighted today in the Street, save for Zambia and Nigeria," he said.

Dubai's recent 5¼% 2043 notes were quoted at 99 1/8 after pricing at 99.148.

"They felt better offered throughout the day," he said. "The 2023s were squeezed up to 100¾ last week. They close at 99¾ bid, 100¼ offered. And the 2043s are holding near 99 to 99 1/8."

And sellers were seen for Dubai Holding.

"A steady stream of retail inquiry where flow was largely balanced," he said.

TAQA performs

Also from the Middle East, Abu Dhabi National Energy Co.'s (TAQA) bonds outperformed on Monday, with the spread movement over the past week and month "very minimal," according to a trader.

"They have their 2013 maturities coming in August and October, which will also be supportive later down the track," the trader said.

International Petroleum Investment Co. saw good investor interest on its 2022s between 115.55 and 1153/4, a trader said.

"Lebanon still feels offered here, but it had a good run," he said. "Saudi Electricity Co. is holding here on spread, about 3 basis points to 5 bps tighter on the week."

ADIB somewhat active

The recent 6 3/8% perpetual notes from Abu Dhabi Islamic Bank that closed Friday at 103.80 on the bid side opened Monday at 103.70 bid, 104.20 offered, a trader said.

The notes priced at par.

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.

Emirates notes tick down

The 4½% notes due 2025 from Dubai's Emirates Airline that recently priced at 99.941 were seen Monday at 99.37 bid, 99.87 offered.

Citigroup, Standard Chartered, Deutsche Bank, JPMorgan, Emirates NBD and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

"Some interest in Emirates Airline," a trader said. "Sellers of 2016s, and buyers of 2025s, basically. The company was in the news today, opening their dedicated A380 terminal."

ADCB taps bookrunners

Abu Dhabi Commercial Bank has mandated Barclays, ING, JPMorgan, National Bank of Abu Dhabi, RBS and Abu Dhabi Commercial Bank for a dollar-denominated issue of notes, a market source said.

The deal is expected to be benchmark-sized.

"A five-year would slot in nicely against their existing 2014 and 2016s," a trader said.

RenCredit sets talk

In other deal-related news, Russia's Renaissance Credit Group - through Renaissance Consumer Funding Ltd. - set price talk at 103 for a planned tap of its 13½% notes due 2018, a market source said.

Goldman Sachs is the bookrunner for the Regulation S-only deal.

The notes are expected to price this week.

And Bank of India has mandated Barclays, Citigroup, HSBC, Deutsche Bank, JPMorgan and BofA Merrill Lynch for a dollar notes issue that will be marketed on a roadshow, a market source said.

Lenta mulls issuance

Monday also saw Russian retailer Lenta considering an issue of notes.

The proceeds of a deal would likely be used to diversify the company's funding sources and finance plans to double the number of its stores over the next three years.

"Although it is unclear what type of bond and currency the company may go for, it certainly will open the potential for issuing in the sector and increase diversity in investing in Russian corporate credit," the London-based analyst said.

Schahin shelves notes

Meanwhile, Brazil-based oil and gas exploration and production company Schahin canceled plans for a dollar-denominated issue of notes due 2020, a market source said.

The notes were talked at a yield in the high-6% to 7% area.

Citigroup, Deutsche Bank, HSBC and Mizuho Securities were the bookrunners for the Rule 144A and Regulation S deal.

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

African Bank in focus

One market source was focusing on another recently canceled deal, the shelved $300 million issue of seven-year notes from South Africa's African Bank Ltd.

The Johannesburg-based lender could face a fine worth $34 million for an alleged "reckless lending allegation," according to a company statement.

Credit Suisse, Goldman Sachs, Rand Merchant Bank and Standard Chartered Bank were the bookrunners for the Regulation S-only deal.

"The regulator has been investigating African Bank since October 2012," the London analyst said. "The proposed bond transaction has been canceled and all previous allocations have been discarded. The issuer may consider reopening the deal in due course, subject to market conditions."

BCI oversubscribed

The recent issue of $500 million 4% notes due 2023 from Chile-based lender Banco de Credito e Inversiones SA drew about $2 billion in orders from 160 investors, a market source said.

About 78% of the orders came from the United States, 20% from Europe and 2% from Asia.

Fund managers picked up 50%, insurers and pension funds 20%, hedge funds 15%, banks and private banks 10% and others 5%.

The notes priced at 99.275 to yield Treasuries plus 212.5 bps via Citigroup, HSBC and JPMorgan in a Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

EdCon sells notes

On Friday, South Africa-based retailer EdCon Pty. Ltd. priced a €300 million issue of 9½% notes due 2018 at 96.50 to yield 10.415%, a market source said.

The notes were talked at the 97 area.

The company scrapped plans for a $200 million issue of notes due in 2018, also talked at the 97 area.

Barclays, Goldman Sachs, Morgan Stanley, BofA Merrill Lynch and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to finance the repurchase of the company's floating-rate notes due in 2014.

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