Uni-President China, Russia's MTS print notes; busy session; SK Innovation roadshow ahead

By Christine Van Dusen

Atlanta, May 30 - Uni-President China Holdings Ltd. and Russia's Mobile TeleSystems OJSC

priced notes on an active Thursday that saw fairly balanced flows and slightly wider spreads for emerging markets assets.

"Very busy again, with a good sprinkling of retail, private banking and the usual semi-professionals entering the fray," a London-based trader said. "The recent bounce in U.S. Treasuries is seeing cash prices slightly underperform. Some semblance of rate stability at around this 2.15 to 2.10 level is supportive, at the moment, for some of the U.S. Treasury-sensitive names like Qatar and parts of Abu Dhabi."

Some sellers were seen for notes from Aldar Properties, which traded at 107½ bid, 108 offered, about 100 basis points wider on the month, he said.

"Seen some nibbling on Dubai Holding's 2014s and 2017s near 100½ and 103 3/8, respectively," he said.

Meanwhile, perpetual notes were "a mixed bag," he said.

"Buyers of Dubai Islamic Bank and sellers of Abu Dhabi Islamic Bank," he said.

DIB's notes, which priced at par, were spotted Thursday at par bid, 100¾ offered. ADIB's perpetuals were seen at 103.12 bid, 103.87 after also pricing at par.

The secondary market also saw bonds from Ukraine hold in fairly well, despite the global sell-off, said Svitlana Rusakova of Dragon Capital.

"Despite abounding fears, price action has not been bad so far and not much has come out for sale," she said. "Corporates were adjusted a 1/2-point lower as well."

In deal-related news, South Korea-based energy and chemicals company SK Innovation has mandated BofA Merrill Lynch, BNP Paribas and Citigroup for a possible issue of notes that will be marketed during a roadshow that starts on June 3.

Middle East in focus

In other trading on Thursday, Emirates NBD and Abu Dhabi Commercial Bank saw buyers while some front-dated bonds performed well, a trader said.

"I still maintain they should be sold to move into better opportunities," he said. "I refer, of course, to the likes of Mubadala's 2014s and 2016s, Qtel International's 2014s and 2016s, Qatar 2014s, 2015s, 2018s."

Investors also showed some interest in notes from International Petroleum Investment Co. (IPIC), Qatar, Qatar National Bank's 2020s and Dubai's 2022s and 2043s.

"Some nibbling in the Dubai space and two-way on Saudi Electricity Co.," he said.

Lively trading day

Two-way activity was noted for Dar al Arkan 2015s and 2018s on Thursday, the London trader said.

"Saw Street sellers and client buyers of Saudi Electricity Co. 2022s, 2023s and 2043s," he said. "Also was not asked once about the new Islamic Development Bank, which is once again closing wider from launch."

The recent 4¼% notes due 2020 from Bahrain Telecommunications Co. BSC (Batelco) were trading just above 99 after pricing at 99.45.

"Some good buying on Abu Dhabi National Energy Co.'s (TAQA) 2023s in the high 97s," he said.

Lat-Am activity limited

From Latin America, trading was quiet for most bonds, particularly the higher-rated credits, a New York-based trader said.

"Account activity was balanced and overall volatility lower for external debt," he said.

Bonds from Venezuela and Petroleos de Venezuela SA (PDVSA) ticked down about ¼ point in trading, he said, while bonds from Argentina saw light volumes.

Uni-President, MTS do deals

In its new deal, Uni-President China Holdings sold RMB 1 billion 3½% notes due 2016 at par to yield 3½% with ANZ, DBS Bank, BofA Merrill Lynch and Mizuho Securities in a Regulation S deal.

The proceeds will be used for general working capital purposes.

And Russian telecommunications provider MTS, through MTS International Funding Ltd., priced a $500 million issue of loan participation notes due 2023 with a 5% coupon, according to a company announcement.

Proceeds from the Rule 144A and Regulation S deal will be used for general corporate purposes.

The company recently postponed a planned offering of ruble-denominated notes due 2018, following talk in the 8¼% area.

SK Innovation taps bookrunners

In other news on Thursday, South Korea's SK Innovation mandated BofA Merrill Lynch, BNP Paribas and Citigroup for a roadshow starting June 3, a market source said.

An issue of notes may follow.

SK Innovation is a Seoul-based energy, lubricants and chemicals company that is part of SK Group.

Final book for IDB

The final book for Islamic Development Bank's recent $1 billion issue of 1.535% Islamic bonds due 2018 was $1.5 billion from 35 accounts, a market source said.

The notes priced at par to yield 1.535%, or mid-swaps plus 30 bps, with bookrunners Standard Chartered, Barwa Bank, Credit Agricole, CIMB, Natixis, National Bank of Abu Dhabi, NCB and RBS in a Regulation S deal.

About 50% of the orders came from the Middle East and North Africa, 25% from Asia, 23% from Europe and 2% from the United States.

China Eastern oversubscribed

Also oversubscribed was the new RMB 2.2 billion issue of 3 7/8% notes due 2016 that China Eastern Airlines priced at par with ABC Hong Kong, Deutsche Bank, HSBC and Standard Chartered Bank.

The deal drew RMB 8.7 billion from 75 accounts, with 88% from Hong Kong, 11% from Singapore and 1% from others.

Banks accounted for 50%, funds 26%, private banks 20% and corporates 4%.

DBS bonds draw orders

Singapore-based DBS Bank Ltd.'s new issue of RMB 500 million 2½% notes due 2016 that priced at 99.76 to yield 2.6% attracted an order book of nearly RMB 2 billion, a market source said.

DBS Group Holdings was the sole bookrunner for the Regulation S deal.

About 51% of the orders came from Hong Kong, 43% from Singapore and 6% from others.

Asset managers picked up 80%, private banks 12% and others 8%.

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