DIB, Gazprom, Russian Standard Bank, Noble, Glorious print notes; hectic session for EM

By Christine Van Dusen

Atlanta, March 13 - Dubai Islamic Bank PJSC (DIB), Russia's OJSC Gazprom, JSC Russian Standard Bank and China's Noble Group Ltd. and Glorious Property Holdings Ltd. sold notes on Wednesday during a feverish trading session for new issues from the Middle East.

The Markit iTraxx SovX index spread started Wednesday at Treasuries plus 172 basis points, wider by 1 bp. The corporate index, seen Tuesday at 217 bps over Treasuries, moved out 2 bps on Wednesday.

"Very busy session," a London-based trader said. "It was the tale of two halves, with Emirates' 2023 dominating the first half and Dubai Islamic Bank PJSC the second half. Net-net, predominantly sellers of both here."

Emirates' 3 7/8% 2023s - which recently priced at 99.331 to yield mid-swaps plus 300 bps - traded Wednesday between 99.15 and 99.35 before ending the session at 99.12 bid, 99¼ offered.

The $1 billion of 6¼% perpetuals from DIB that priced at par on Wednesday were quoted between 100.10 and 100.65 before closing at 100.15 bid, 100.45 offered.

"So another slightly disappointing start for Emirates airline," the trader said. "Not as bad as the 2025, which dropped 1¾ points but is still closing offered below re-offer."

DIB's deal was "not a bad effort, all told," he said. "A textbook transaction, massive book, pricing squeezed all the way in and 80% of inquiries in the first few hours post-pricing are sell orders."

Investors were also focused on Ukraine on Wednesday, with particular interest in UkrLandFarming plc's ongoing roadshow and JSC State Savings Bank of Ukraine (Oschadbank), which set price talk.

"Sovereign quotes up by a ¼ point," said Svitlana Rusakova of Dragon Capital. "Ukraine's 2017s were hit several times at 1101/2, but demand seems to stay there. All eyes remain on Oschadbank's new issue and UkrLandFarming's debut placement."

ADIB, ADCB notes active

In other trading on Wednesday, Abu Dhabi Islamic Bank (ADIB)'s perpetual issue was exceptionally busy, a trader said.

"Let's see how it trades in the morning, once the locals are back in office," he said.

The 2023 notes that Abu Dhabi Commercial Bank (ADCB) recently priced at 99.127 were active, closing at 101.20 bid, 101.35 offered.

"Very good effort for this bond," the London trader said. "The free float is disappearing."

And International Petroleum Investment Co. (IPIC)'s notes were active, with buyers reported for the company's 2020s and 2041s.

"We continue to see interest on the euro bonds," he said. "There continues, as it has for 10 years, to be a dearth of decent euro paper from the region."

Gazprom sells bonds

In its new deal, Russia-based global energy company Gazprom priced a two-tranche issue of €1.5 billion notes due 2020 and 2025, with both tranches coming to the market at par.

Credit Agricole, Gazprombank and JPMorgan were the bookrunners for the Regulation S deal.

The deal included €1 billion 3.389% notes due March 20, 2020 that priced at par to yield 3.389%, or mid-swaps plus 210 bps. The notes were talked at mid-swaps plus the 215 bps area.

The second tranche of €500 million 4.364% notes due March 21, 2025 priced at par to yield 4.364%, or mid-swaps plus 240 bps.

The notes were talked at a spread in the mid-swaps plus 245 bps area.

DIB, Noble Group do deals

Wednesday also saw Dubai's DIB price $1 billion 6¼% perpetual notes at par to yield 6% after talk of a yield in the 7% area.

Dubai Islamic Bank, Emirates NBD Capital, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S sukuk.

And China-based conglomerate Noble Group sold $400 million 3 5/8% notes due March 20, 2018 at 99.268 to yield Treasuries plus 290 bps via BofA Merrill Lynch, Citigroup, ING, JPMorgan and Societe Generale were the bookrunners in a Regulation S deal.

Russian Standard Bank issuance

Other new deals came to the market on Wednesday, including Russian Standard Bank's RMB 750 million increase of its 8% notes due Feb. 14, 2015.

The notes priced at 101.25 to yield 7.274% with BNP Paribas and HSBC in a Regulation S deal.

And Chinese property developer Glorious Property Holdings priced a $150 million increase of its 13¼% notes due March 4, 2018 at par to yield 13¼%, a market source said.

Deutsche Bank, Haitong Securities, ICBCI, JPMorgan, RBS and UBS were the bookrunners for the Regulation S deal.

The original $250 million issue priced in February at par to yield 13¼%.

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

Ukraine corporates in focus

Ukraine-focused integrated agricultural producer UkrLandFarming is on a roadshow with Citigroup, Deutsche Bank and Sberbank CIB for a benchmark-sized issue of bonds, a market source said.

The Rule 144A and Regulation S roadshow began Tuesday in New York and will travel to Boston, Los Angeles and London before concluding on March 18 in London.

Also from Ukraine, energy holding company DTEK is planning an issue of new dollar notes as part of a tender offer with Deutsche Bank and JPMorgan.

And Oschadbank has set price talk in the high-8% area for a dollar-denominated issue of notes due in five years with bookrunners Credit Suisse, Deutsche Bank and JPMorgan in a Regulation S offering.

Severstal oversubscribed

The final book for Russia-based steel and mining company OAO Severstal's $600 million 4.45% notes due March 19, 2018 was about $2 billion, with 33% of the orders from the United States, 28% from Russia, 21% from Europe, 16% from the United Kingdom and 2% from others.

Asset managers picked up 50%, banks 29%, private banks 12%, insurance and pension funds 8% and others 1%.

The notes priced at par via Citigroup, JPMorgan and Sberbank CIB in a Rule 144A and Regulation S deal.

"The new issue is on the rich side, compared to the existing 2017s, which are at 340 bps, although trading at a lower cash price," the London-based analyst said. "On the back of this issue, we view the group as adequately covered for this year, and we would not expect further issuance in the near term."

Santander Brasil draws orders

Also oversubscribed was Banco Santander Brasil's R$750 million 8% notes due March 18, 2016 that priced at par to yield 8%, with the final book at more than R$1.6 billion from 104 accounts.

About 37% of the orders came from Latin America, 37% from the United States, 24% from Europe and 2% from Asia.

Fund managers accounted for 34%, pension funds 23%, private banks 19%, hedge funds 13%, insurance 3%, banks 2% and others 5%.

Barclays, BTG Pactual, Deutsche Bank and Santander were the bookrunners for the Rule 144A and Regulation S transaction.

In other news, Mexico has mandated BNP Paribas, Deutsche Bank and HSBC for a roadshow in Europe, a market source said.

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