China Development prices bonds; Burgan, SECO see demand; Pakistan, Ethiopia deals ahead

By Christine Van Dusen

Atlanta, Nov. 25 – China Development Bank sold notes on Tuesday and long-dated bonds from the Middle East saw demand as the move in Treasuries gave support to emerging markets assets.

Investors were attracted to names like Saudi Electricity Co., International Petroleum Investment Co., Bahrain and bonds from throughout Abu Dhabi and Dubai, a London-based trader said.

“Some good clips trading in the Street,” he said. “Qtel International 2025s were active, as were the 2028s.”

And investors clamored for Kuwait-based Burgan Bank SAK’s 2020s, which traded at 117½ bid, about 20 basis points better than in previous sessions.

“Never the easiest bond to trade, but it continues the theme of money and demand in the Kuwait space,” he said.

In other trading, bonds from Ukraine have experienced something of a sell-off so far this week, said Svitlana Rusakova of Dragon Capital.

“The sovereign sold off on no apparent headline drivers, giving up Friday’s gains and then some more,” she said.

The sovereign’s 2017s have seen two-way flows near 83 and better buying at lower levels, she said.

“The long end was illiquid,” she said. “Quasi-sovereign banks were offered down.”

But solid demand remained for the State Export-Import Bank of Ukraine’s (Ukreximbank) 2015s and bonds from OJSC Oschadbank.

Looking to Latin America, most sovereign bonds ended Tuesday with tighter spreads as the tone remained positive, a New York-based trader said.

Credit default swaps tightened for Brazil and Mexico, he said, and prices on medium- to longer-dated bonds rallied more than 50 cents.

Venezuela and PDVSA finished the session with slightly higher prices, even as oil weakened.

Though volumes for Argentina bonds were light, other bonds in the region saw fairly heavy volumes, he said.

Lat-Am corporates firm

Most corporates from Latin America firmed up throughout the day, another New York-based trader said. Better bids were spotted for Braskem SA, Gerdau SA and Votorantim Cimentos SA.

But longer-dated Brazil-based Petroleo Brasileiro SA continued to reel from its corruption scandal, widening about 5 bps on lighter volumes, he said.

“The short end held in well, closing unchanged as the selling on that part of the curve still exists but not nearly as strongly,” he said.

Bonds from Brazil’s RioPrevidencia were quiet but firmer, he said, and Odebrecht saw lower volumes but strong bids.

Corporates from Colombia were mostly quiet and flows were almost non-existent for Mexico’s high-grade bonds.

Issuance from CDB

In its new deal, China Development Bank priced a two-tranche issue of $650 million notes due on Dec. 2, 2019 and 2024, a market source said.

The deal included $250 million 3¼% notes due 2019 that priced at 99.470 to yield 3.366%, or Treasuries plus 175 bps.

The $400 million 4¼% notes due 2024 priced at 99.092 to yield 4.363%, or Treasuries plus 205 bps.

Standard Chartered Bank, Goldman Sachs, Morgan Stanley, ANZ, Barclays, Citic Securities, Citigroup, DBS Bank, Deutsche Bank, HSBC and RBS were the bookrunners for the Regulation S deal.

The issuer is a financial institution based in Beijing.

Kenya prices taps

Kenya set talk for taps of its dollar-denominated notes due in 2019 and 2024 that priced in June, a market source said.

The 2019s were talked at a yield of 5¼% and the 2024s were talked at a yield of 6¼%.

Barclays, JPMorgan and Standard Chartered Bank are the bookrunners for the deal.

The original $500 million 5 7/8% notes due 2019 came to the market at par to yield 5 7/8%, following talk in the low-6% area.

The $1.5 billion 10-year notes priced at a yield of 6 7/8%, following talk in the low-7% area.

The new notes were expected to price on Tuesday, but details were not available at press time.

Talk from Pakistan

Pakistan set talk in the 6 7/8% area for its five-year issue of dollar-denominated and benchmark-sized Islamic bonds, a market source said.

Citigroup, Deutsche Bank, Dubai Islamic Bank and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

Ethiopia sets roadshow

Ethiopia has planned a roadshow for a dollar-denominated issue of notes due in 10 years, a market source said.

Deutsche Bank and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

Korean corporate sells bonds

On Monday, Korea East West Power printed a $500 million issue of 2½% notes due June 2, 2020 at 98.888, a market source said.

Barclays, BNP Paribas, BofA Merrill Lynch, Citigroup, Credit Suisse, HSBC and UBS were the bookrunners for the Rule 144A and Regulation S deal.

The Seoul-based issuer is a wholly owned unit of state-owned Korea Electric Power Corp.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.