Chinese issuers, Czech Republic, Colombia, Gennoma, TDIC plan notes; investors 'cautious'

By Christine Van Dusen

Atlanta, July 5 - The Czech Republic, China ITS Holdings Co. Ltd., China's Intime Department Store Group Co. Ltd., the Republic of Colombia, Mexico's Gennoma Lab Internacional SAB de CV and Abu Dhabi's Tourism Development & Investment Co. took steps toward the market on Tuesday as the participants eased back to business following the July 4 holiday.

"It's a cautious start to the month," a London-based trader said.

Said another trader: "Spreads closed out the day a little wider."

Flows were mixed, with good demand seen for Qatar's Qtel International and Kuwait's Kipco. Nigeria and Russia were two other standouts on Tuesday.

"It was a fairly busy day," the London trader said. "Risk-wise, purely as a result of flows, I'm close to home at the moment. At this time of year one can almost smell the sunscreen ahead of the summer holidays. In fact, parts of today were very dull. There were plenty of prices and liquidity around, just limited action."

Czech Republic taps banks

The Czech Republic has mandated Barclays Capital, Erste Group, Societe Generale and Unicredit for a euro-denominated issue of benchmark bonds, a market source said.

The notes are expected to launch before the end of the year.

This news followed the Friday pricing of Estonia-based electricity grid operator Elering AS's €225 million 4 5/8% notes due July 12, 2018, which came to the market at 98.812 to yield 4.829%, or mid-swaps plus 173 basis points.

Deutsche Bank and Nordea Markets were the bookrunners for the Regulation S-only transaction.

Croatia oversubscribed

The final book for Croatia's recent €750 million issue of 5 7/8% notes due 2018 - which priced on June 30 at 98.60 to yield mid-swaps plus 300 bps - was €1.4 billion with 200 accounts involved, a market source said.

About 30% of the orders came from Germany and Austria, 19% from Croatia, 11% from the United Kingdom, 8% from Asia, 6% from Benelux countries, 6% from the Nordic countries, 6% from Central and Eastern Europe, 6% from Switzerland, 5% from Italy, 2% from France and 1% from others.

Asset managers accounted for 50%, banks 33%, insurers 12% and others 5%.

Chinese corporates plan deals

Two Chinese corporate issuers are planning renminbi-denominated notes.

China ITS' Regulation S offering will come to the market via DBS Bank and Wing Lung Bank in a Regulation S deal.

The proceeds will be used to fund the transportation infrastructure technology solutions and services provider's acquisitions, expenses and capital required for overseas growth, and for general working capital.

And Beijing-based department store operator Intime Department Store Group is planning a renminbi-denominated issue of bonds via Citicorp, Nomura and ICBC Asia in a Regulation S deal.

The proceeds will be used to fund future expansion, for general corporate purposes and for the repayment of existing debt obligations.

Colombia, Gennoma plan notes

Looking to Latin America, Colombia is planning a dollar-denominated issue of notes, according to a filing with the Securities and Exchange Commission.

The sovereign previously announced that Bank of America Merrill Lynch, Barclays Capital and Citigroup were mandated for a roadshow from June 20 to June 24.

The notes include a make-whole call, and proceeds will be used for general budgetary purposes.

And Mexico-based pharmaceutical company Gennoma Lab is mulling a dollar-denominated issue of notes, a market source said.

The deal is expected to price by the end of the year.

TDIC plans roadshow

From the Middle East, Abu Dhabi-based developer Tourism Development & Investment (TDIC) is planning a roadshow for an issue of $1 billion bonds, a market source said.

BNP Paribas, HSBC, National Bank of Abu Dhabi, Standard Chartered Bank and RBS are the bookrunners for the deal.

The proceeds will be used for construction and other projects.

But Dubai's Majid Al Futtaim Holding LLC has postponed its planned issue of notes due to market conditions, a market source said.

The notes were to be sold from the real estate developer's $2 billion medium-term note program.

Barclays Capital, Credit Agricole, HSBC and Standard Chartered Bank were the bookrunners.

"It must be the all-in yield issue here," a trader said. "The market is pretty well bid."

Dubai widens

In trading from the Middle East, Dubai opened on Tuesday a touch wider while good demand was seen for Qatar's Qtel, a trader said.

He also noted that Qatar was steady and better buying was seen for Qatar National Bank's 2015 notes.

And trading activity was seen for Abu Dhabi National Energy Co., Dubai's DP World and Abu Dhabi Islamic Bank.

"Also good demand for Kuwait's Kipco recently," he said.

Afreximbank mandates leads

Meanwhile, Egypt-based lender African Export-Import Bank (Afreximbank) has mandated HSBC, Commerzbank, Mitsubishi UFJ Securities and Standard Bank for a dollar-denominated issue of notes that will be marketed during a roadshow, a market source said.

The marketing trip for the Regulation S notes will take place in Asia and Europe.

"We're not seeing much in the way of selling in Afrexim's 2014 dollar notes ahead of their roadshow," a trader said.

Said another trader: "Given the outstanding 2014 dollar notes trade at z-spread plus 325 bps, with no selling today, and how well African risk performs in general, the timing is good."

Nigeria trades up

Elsewhere in Africa, Nigeria's 2021 dollar bonds - which priced on Jan. 20 at 98.223 - were seen Tuesday at 105.37 bid, 106.37 offered.

"Nigeria powers on. It does not feel like one to short," he said. "We're still seeing demand for GTB Finance BV."

And Gabon and Ghana were holding.

Turkey in focus

Also on Tuesday, the sovereign curve for Turkey started the day six to seven bps wider with corporates roughly unchanged, a trader said.

Retail interest was seen for Turkiye Is Bankasi AS' 2016s, and better buying was seen for Garanti Bankasi AS' 2021s. Better selling was noted for Garanti's 2017s, Yasar Holdings AS' 2015s and Yuksel Insaat's 2015s.

By the European afternoon, the sovereign curve was "slightly sold off," a trader said, "mainly by locals and is trading 10 to 15 bps wider."

Russia performs

In other trading, Russia was a standout, particularly in the quasi-sovereign space, a trader said.

"Five-year Gazprom bonds are now 60 bps tighter for the five-year over last week," he said.

But Bank of Moscow's bonds continued to underperform, seen 25 bps wider.

From the Ukraine, the City of Kiev's recent new issue was starting to perform on Tuesday. The notes due 2016 priced on June 30 at par to yield 9 3/8%.

"They're now yielding just under 9.2%," he said.

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