Abu Dhabi Commercial Bank, Empresas ICA, Raghsa, Bank of India sell notes; others on tap

By Christine Van Dusen

Atlanta, Feb. 9 - Abu Dhabi Commercial Bank, Mexico's Empresas ICA SAB de CV, Argentina's Raghsa SA and Bank of India printed notes on a Wednesday marked by a rise in risk aversion and a widening of spreads as investors sought to consolidate following a recent rally.

"EM spreads are moving wider as risk aversion is back in play in the open," a New York-based trader said.

And while Egypt's troubles were having less of an impact on emerging markets assets than in previous days, market-watchers remained concerned about possible contagion effects.

"We're in the middle of a significant profit-taking, or corrective period, of the cycle, where we've had a very significant take-up in position and allocations in EM and high-beta markets over the last year or two," said Nick Chamie, head of emerging markets research for RBC Capital Markets. "Given that valuations have significantly rallied, leaving generally much less impressive prospective returns on offer from the current level, we're in for a period of consolidation over the next weeks and months."

So the credit markets were quieter than usual, and not even the continuing turmoil in the Middle East could provide much of a jolt.

"Egypt, perhaps the only [issuer] that has the potential to disrupt the calm, has so far been paid little heed by participants in developed markets," said Gavan Nolan, analyst with Markit, in a report. "The sovereign saw its spreads widen today."

Brazil, for one, saw its spreads push higher by 3 to 5 basis points.

"The higher-beta credits have prices off by 0.375 to 0.75," the New York-based trader said.

Abu Dhabi bank prints notes

Still, several issuers brought new deals to market on Wednesday.

"Global credit spreads really haven't been infected that badly, so those issuers that do have a need are eager to tap the markets for fear that the window may close quite soon," Chamie said. "So I think you are seeing that those that are a bit more in need of the funds are tapping now as opposed to others who can afford to wait, given the deteriorating backdrop."

Among the new issues of the day was Abu Dhabi Commercial Bank's CHF 150 million 3% senior notes due Dec. 8, 2015 that priced at 99.595 to yield 3.095%, or mid-swaps plus 162 bps, a market source said.

The notes - via RBS and UBS - priced in line with talk, which was set at mid-swaps plus 162 bps, and proceeds will be used for debt refinancing and working capital.

ICA prices tap

In another new deal, Mexico-based construction company Empresas ICA priced a $100 million tap of its 8.9% notes due Feb. 4, 2021 at 99 to yield 9.054%, a market source said.

Bank of America Merrill Lynch was the bookrunner for the Rule 144A and Regulation S transaction.

The original $400 million deal priced Feb. 1 at 98.545 to yield 9 1/8%. Proceeds will be used to repay outstanding secured debt and for general corporate purposes, including equity contributions and for new and existing projects.

Raghsa does deal

Also on Wednesday, Argentina-based real estate developer Raghsa priced $100 million notes due February 2017 at par to yield 8½%, in line with talk, a market source said.

JPMorgan and Banco Itau were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used for debt refinancing and for working capital.

And Bank of India priced a $750 million two-tranche issue of notes due 2015 and 2021, a market source said.

The deal included $250 million 4¾% notes due Oct. 7, 2015 that came to market at 100.18 to yield Treasuries plus 235.5 bps. That priced in line with talk of Treasuries plus 235.5 bps.

A $500 million tranche of 6¼% notes due Feb. 16, 2021 priced at 99.587 to yield Treasuries plus 260 bps, in line with talk of Treasuries plus 260 bps.

Barclays Capital, Deutsche Bank, HSBC, RBS and Standard Chartered were the bookrunners for the Regulation S deal.

Alsacia on tap

Also from Latin America, Chile-based transportation company Inversiones Alsacia SA set the size for its planned issue of notes at $464 million and the tenor at eight years, a market source said.

Bank of America Merrill Lynch and JPMorgan are the bookrunners for the deal, which is expected to price Friday.

Romania is planning a euro-denominated issue of notes sometime during the first quarter of the year, a market source said.

Market sources were also whispering about a possible tap of Turkey's 5 5/8% dollar notes due 2021, as well as an issue of samurai bonds due that same year.

Slovak Republic plans deal

Also ahead is Russia's Vnesheconombank's CHF 100 million tap of its existing 3¾% notes due Feb. 17, 2016, which was talked at the mid-swaps plus 224 bps area, a market source said.

Barclays and BNP Paribas are the bookrunners for the deal.

The original CHF 400 million issue priced on Jan. 19 at par to yield 3¾%.

And the Slovak Republic has mandated KBC Group, Erste Group and Intesa Sanpaolo Group for a tap issue of its bonds due Feb. 24, 2016, according to an announcement from the sovereign.

The deal will be launched soon.

"You certainly don't see nearly as much new issuance as was the case a couple of weeks ago," Chamie said. "It's indicative of the fact that there's quite a lot less conviction out there, and bullish sentiment, than was the case when the year got kicked off."

Sukuk paper holds up

The London trader on Wednesday was watching Abu Dhabi-based Aldar Properties PJSC after the property developer reported a full-year loss related to problem assets.

In response, Aldar's 2014 dollar notes opened Wednesday at 109.50 bid, 110.25 offered after finishing Tuesday at 109.770 bid, 110.520 offered.

Qatar Islamic Bank's 2015 notes were seen trading up at 100.625.

"You've really gotta hand it to the sukuk paper - [it] holds very well," he said.

Long-time laggard Bahrain's 2020 bonds were seen at 96.62 bid, 97.12 offered, up 25 bps on the month.

"Dubai's 6.396% 2014 dollar notes had good interest, at 100.375 in the street," he said.

And Indonesia's 2020s were seen trading at 106.125 bid, 106.620 offered, with a low print of 105.75 in the morning.

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