Hungary issues notes; Russian bonds tighten; Turkey weakens; Maoye sets talk; Slovenia on deck

By Christine Van Dusen

Atlanta, March 18 - Hungary sold notes on Tuesday as investors sought out small batches of Russia's bonds and paper from Turkey weakened slightly.

"Customer flows continue to be mixed," a New York-based trader said.

Most names from Russia closed tighter on Tuesday, with banks a standout. Vnesheconombank's 2023 bond, for one, was up a point.

"We are seeing interest in corporates, such as Alrosa, Gazprom, Rosneft and MTS," a London-based analyst said. "Overall, the slightly more positive tone from yesterday is continuing. This is all in spite of President Putin recognizing the independence of Crimea - the first step towards integration with Russia - and sanctions imposed by the E.U. and U.S. yesterday."

Though Russian bonds have been able to regain some recent losses this week, notes from Ukraine remain under pressure, said Svitlana Rusakova of Dragon Capital.

"Some of the reasons mentioned were fears of new separatist moves in eastern Ukraine and re-militarization of the country taking away focus from repairing the economy," she said.

Meanwhile, paper from Turkey was slightly weaker while bonds from Central and emerging Europe and the Middle East remained strong on Tuesday, she said.

Looking to Latin America, bonds from Petroleo Brasileiro SA (Petrobras) were tighter on Tuesday, with the 2019s leading the way, a New York-based trader said.

The company's 2023s also tightened, he said, as the overall market was better bid.

In deal-related news, China's Maoye International Holdings Ltd. set talk for its upcoming renminbi-denominated issue of notes, Slovenia has mandated banks for a deal and Indonesia's PT Pertamina is looking to issue Islamic bonds.

Lat-Am in focus

Corporate issues from Colombia were range-bound, unable to move higher, the New York-based trader said.

"Still feel skittish," he said. "Chile high-grade corporates are strong and possess a much better feel, with favorable liquidity."

Bank bonds from Peru were standouts on Tuesday, and Mexico's Cemex SAB de CV saw its bonds bounce, he said.

Middle East rock-solid

From the Middle East, bonds were very solid "as more money was put to work in the market," a London-based trader said.

Abu Dhabi-based International Petroleum Investment Co. remained "a rock," he said. "In fact, all of Abu Dhabi is a rock, with Dolphin Energy's 2019s and Aldar Properties' 2018s looking decent enough."

Qatar was popular in trading on Tuesday, as was Qatar National Bank.

"Inventory is being depleted from dealers and there are still plenty of smoke and mirrors in the Street, via auctions and the like," he said.

Kuwait bonds busy

Kuwait's bonds were active in the secondary market on Tuesday, with Kuwait Projects Co.'s (Kipco) 2020s still trading at above 125, the London trader said.

"Looks like an OK value," he said. "Burgan Bank is also benefitting from the demand on Kipco."

Bonds from Bahrain are well offered, he said.

"I see 10 to 12 bonds with decent technicals and value, and this market has - once again - found itself in a situation where it is crying out for some supply," he said.

Hungary prices notes

In its new deal, Hungary priced $2 billion 5 3/8% notes due 2024 at 98.663 to yield 5.551%, or Treasuries plus 287.5 basis points, according to filing from the sovereign.

The sovereign also sold $1 billion of 4% five-year notes at 99.356 to yield 4.144%, or 260 bps over Treasuries.

BNP Paribas, Citigroup, Deutsche Bank and JPMorgan were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general funding purposes.

Maoye gives guidance

China-based department store Maoye set talk in the 7¼% area for its upcoming issue of renminbi-denominated and benchmark-sized notes due in three years, a market source said.

Citigroup and Deutsche Bank are the bookrunners for the Regulation S deal.

The proceeds will be use to refinance existing debt and for general corporate purposes.

Slovenia sets roadshow

Slovenia has mandated Barclays, Commerzbank, HSBC, Societe Generale and Unicredit as bookrunners for a euro-denominated issue of benchmark-sized notes that will be marketed during a roadshow, a market source said.

The marketing trip will begin on March 25 in London and travel to Amsterdam, Paris and Frankfurt before wrapping up on March 28 in Vienna and Munich.

A Regulation S deal is expected to follow.

Pertamina plans sukuk

Indonesia's Pertamina is looking to issue $3 billion of Islamic bonds, a market source said.

No other details were immediately available on Tuesday.

Pertamina is a state-owned oil and gas company based in Jakarta, Indonesia.

Promsvyazbank details

Russia's OJSC Promsvyazbank released details on its new issue of $100 million 10½% notes due 2021, which priced at par to yield 10½%, or mid-swaps plus 825.7 bps, according to a company filing and a market source

The Rule 144A and Regulation S deal, via issuer PSB Finance SA, came to the market on Friday.

The proceeds will be used to finance loans to Promsvyazbank, a Moscow-based lender.

Beijing corporate draws orders

The final book for Beijing Infrastructure Investment's recent $300 million issue of 3 5/8% notes due 2019 was $1.5 billion from 96 accounts, a market source said.

About 92% of the orders came from Asia and 8% from Europe, with asset and fund managers picking up 41%, banks 35%, insurers 19%, private banks 3% and others 2%.

The notes came to the market at 99.638 to yield Treasuries plus 210 bps via bookrunners RBS, Wing Lung Bank, ICBC (Asia) and ICBC International.

Final book for China bank

Also oversubscribed was China-based Bank of Communications Co. Ltd.'s recent issue of RMB 1.5 billion 3.3% notes due 2016 that priced at par, a market source said.

The deal attracted RMB 3 billion from 66 orders, with 86% from Asia and 14% from Europe.

Banks accounted for 48%, asset and fund managers 25%, private banks 21% and insurers 6%.

Bank of Communications HK, Bank of Communications International, Citic Securities and HSBC were the bookrunners for the deal.

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