Primary hosts deals from Investment Corp. of Dubai, Chinese lenders; Russia in focus

By Christine Van Dusen

Atlanta, May 14 - Investment Corp. of Dubai, Agricultural Development Bank of China and Industrial and Commercial Bank of China Ltd. sold notes on Wednesday as investors continued to closely watch Russia.

"It is becoming increasingly clear that the next round of sanctions from Europe will only come if the May 25 presidential election is disrupted by Russia, following comments from politicians," a London-based analyst said. "The French foreign minister also stated that future sanctions could hit the energy, defense and finance sectors, but one would assume European sanctions are likely to remain relatively light compared to the Americans."

In light of this, bonds from most emerging markets were a bit weaker on Wednesday morning, she said.

Russian state banks were about 10 basis points wider.

"Turkey is seeing sellers," she said.

Still, Latin American bonds managed to put in an "impressive day," moving higher, a New York-based trader said.

Bonds from Brazil and its corporates, which were lower last week and paused at the start of this week, were lifted on Wednesday, he said.

Banks from Peru climbed, he said, and other corporates strengthened.

"Spread credits continue to perform admirably here in the face of markedly lower U.S. Treasury yields," he said.

On the new-deal front, Kazakhstan Temir Zholy Finance BV planned a roadshow, China's Yanzhou Coal Mining Co. Ltd. set the tenor for its upcoming deal and Korea mandated bookrunners for a marketing trip.

In other news, the final book for Bank of China's new RMB 1.5 billion issue of 3½% notes due 2017 - which priced this week at par - was more than RMB 3 billion, a market source said.

The notes came to the market at a yield of 3½% via Bank of China, Credit Suisse, Deutsche Bank and ING in a Regulation S deal.

ICD prints two tranches

In its new deal, Investment Corp. of Dubai priced a two-tranche issue of $1 billion notes due May 21, 2020 and 2024, a syndicate source said.

The deal included $700 million notes due 2020 that priced at par to yield 3.508%, or mid-swaps plus 160 bps.

The $300 million 4 5/8% notes due in 2024 priced at 99.313 to yield 4.712%, or mid-swaps plus 210 bps.

Citigroup, Dubai Islamic Bank, Emirates NBD, HSBC and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Chinese bank prices bonds

Agricultural Development Bank of China priced RMB 2 billion two-year notes at par to yield 3%, a market source said.

Bank of China, Standard Chartered Bank, ICBC Asia, CCB International, Agricultural Bank of China, Bank of Communications, HSBC, Credit Agricole and National Australia Bank were the bookrunners for the Regulation S deal.

ICBC Singapore issues notes

Industrial and Commercial Bank of China's Singapore branch priced $700 million 2½% notes due Nov. 21, 2017 at 99.551 to yield 2.635%, or Treasuries plus 180 bps, a syndicate source said.

The pricing matched talk, set at Treasuries plus 180 bps.

ICBC Singapore branch, ICBC Asia, ICBC International, DBS Bank, HSBC, JPMorgan and Standard Chartered Bank were the bookrunners for the Regulation S deal.

ICBC is a lender based in Beijing.

Railway issuer eyes roadshow

Railway operator Kazakhstan Temir Zholy will set out on May 20 for a roadshow to market a Swiss franc-denominated offering of notes, a market source said.

Credit Suisse, Deutsche Bank, HSBC and UBS are the joint bookrunners for the Regulation S deal.

Yanzhou sets tenor

China's Yanzhou Coal Mining set the tenor at perpetual for its offering of dollar-denominated and benchmark-sized notes (Ba1//BB), according to a company filing.

Deutsche Bank, UBS and Credit Suisse are the bookrunners for the Regulation S deal.

The proceeds will be on-lent to the company's subsidiaries for the repayment of debt, capital expenditures, working capital and for general corporate purposes.

The notes are expected to price this week.

The coal production, processing, marketing and transportation company is based in Zoucheng, China.

Korea mandate

Korea has mandated Barclays, BofA Merrill Lynch, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Korea Development Bank and Samsung Securities as bookrunners for a roadshow, a market source said.

The roadshow will begin on May 20.

No other details were immediately available on Wednesday.

Arendal launches deal

Mexico-based construction company Arendal S de RL de CV launched $100 million two-year notes at 10½%, a market source said.

The notes were talked at a yield in the mid-10% area.

Espirito Santo Investment Bank is the bookrunner for the deal.

The proceeds will be used for general corporate purposes.

United Overseas Bank talk

Singapore's United Overseas Bank Ltd. set talk in the 3.55% area for its upcoming issue of Singapore dollar-denominated notes due in 12 years (expected ratings: A2//A+), a market source said.

ANZ, HSBC, UBS and United Overseas Bank are the bookrunners for the Regulation S deal.

The notes are non-callable for six years.

Montenegro sells notes

On Tuesday, Montenegro sold €280 million 5 3/8% five-year notes (Ba3/BB-/) at 99.466 to yield 5½%, following final talk in the 5 5/8% area, a market source said.

Talk was initially set at a minimum of 5½% and then revised to the high-5% area.

Citigroup, Deutsche Bank and Erste Group were the bookrunners for the Rule 144A and Regulation S deal.

The notes were offered in conjunction with an exchange and tender offer for Montenegro's existing 2015 and 2016 notes.

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