Gemdale brings new deal; Turkey, Ukraine bonds suffer; talk from Islamic Development Bank

By Christine Van Dusen

Atlanta, Feb. 25 - China's Gemdale Corp. sold notes on Tuesday as controversy in Turkey weakened sovereign bonds and the political turmoil in Ukraine battered its paper.

"Ukraine remains highly uncertain," a London-based analyst said. "Rhetoric from the Russians has been highly inflammatory, with the financial package now on hold."

Ukraine sovereign paper declined on Tuesday morning as a result.

Meanwhile, bonds from Turkey opened weaker on Tuesday on allegations that Prime Minister Tayyip Erdogan told his son to dispose of money before a police raid.

"The prime minister has sternly denied the allegations," the analyst said.

Turkey's 2045s opened 1¼ points lower than the previous day's highs, she said.

"Turkish banks are seeing some sellers, particularly Yapi Kredi," she said. "Turkish corporates feel better supported."

Looking to Russia, bonds were softer on Tuesday morning.

"Russia's 2030s are down 1/8 point but with activity relatively limited in banks and corporates," she said.

In other trading, Latin American credits continued to move higher on Tuesday, though Brazil-based Vale SA's notes were mostly unchanged, a New York-based trader said.

Supply is limited, he said, so dealers are taking a cautious approach to what and how much they'll offer.

"Accounts are better buyers," he said. "More and more issues are getting squeezed."

Odebrecht's 2042s moved up about a ¼ point in trading on Tuesday.

Corporate bonds from Peru and Colombia were mostly unchanged while corporates from Mexico and Chile were better bid, he said.

Middle East eyed

The tone was very positive for bonds from Dubai on Tuesday, a trader said.

"It feels like there's a new wave of buying, adding, squeezing, tightening, rallying and lifting," he said.

Dubai Electricity and Water Authority saw good demand during Tuesday's session, he said.

"The market is still crying out for a new issue from this space," he said.

Bahrain Telecommunications Co.'s 2020s were 60 basis points tighter on the week, he said.

"Busy day, all told," a trader said.

In other trading from the Middle East, Kuwait Projects Co.'s 2019s saw retail interest, a trader said.

"Perpetuals are quieter today," he said.

Bank deal sees demand

Abu Dhabi Commercial Bank PJSC's new $750 million issue of 3% notes due 2019 tightened 10 bps on Tuesday morning amid good demand, a trader said.

The notes priced at 99.765 to yield mid-swaps plus 140 bps via bookrunners BofA Merrill Lynch, Barclays, ING and JPMorgan in a Regulation S deal.

"I closed the new ADCB 2019s at 100.30 bid, 100.35 offered and she has done very well, I must admit," he said. "Pretty much a textbook new issue - announce in the morning, book build, tighten, price at 4 p.m. and it's free to trade before the close of play."

Africa in focus

From Africa, Nigeria bonds were on the move on Tuesday morning, a trader said.

"A little bid is creeping back into this space, led today by Nigeria, where a host of buyers appeared," he said. "Sovereign bonds close 18 bps better, with the 2018s closing 10 bps better."

Egypt's 2020s were "steady," closing at 101 on the bid side, or 50 bps tighter on the month, he said.

"Still seeing interest in Morocco, with the 2042 almost 15 bps tighter on the month," he said. "Ghana has seen some nibbling, with the 2023s nicely off the 87 low print last night, closing at 90 to 91."

Bonds from South Africa inched wider, he said.

Gemdale does deal

China-based real estate developer Gemdale priced an RMB 750 million issue of three-year notes at a yield of 6 7/8%, a syndicate source said.

The notes were talked at a yield in the 6 7/8% area.

The Regulation S notes were issued by Gemdale (Asia) Investment Ltd.

Standard Chartered Bank Hong Kong, CICC HK Securities, Credit Suisse, DBS Bank, Deutsche Bank, HSBC and ICBC Asia were the joint bookrunners for the deal. Standard Chartered Bank Hong Kong was the sole global coordinator.

The proceeds will be used to refinance debt.

Other details on the pricing of the deal were not immediately available on Tuesday.

Bank of China launches notes

Bank of China Ltd. has launched an RMB 3 billion two-tranche issue of notes due 2016 and 2019, a market source said.

The RMB 2 billion notes due in 2016 launched at 3.3%.

The RMB 1 billion notes due in 2019 launched at 4%.

Bank of China, DBS Bank, OCBC Bank and Standard Chartered Bank are the bookrunners for the Regulation S deal. Agricultural Bank of China is the co-manager.

The proceeds will be used for general corporate purposes.

Gazprombank sets talk

Russia's OJSC Gazprombank set talk in the Treasuries plus 360 bps-area for its dollar-denominated issue of notes due in 5½ years, a market source said.

No other details were immediately available on Tuesday.

Gazprombank is a Moscow-based lender.

Islamic bank gives guidance

Islamic Development Bank set initial guidance in the mid- to high-200 bps-area for its upcoming issue of dollar-denominated Islamic bonds due 2019, a market source said.

CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered Bank are the bookrunners for the Regulation S sukuk.

The notes are expected to price on Thursday.

The issuer is a Jeddah, Saudi Arabia-based lender.

Indonesia plans roadshow

Indonesia will set out on Wednesday for a roadshow to market a possible dollar-denominated issue of Islamic bonds, a market source said.

BofA Merrill Lynch, Citigroup and Deutsche Bank are the bookrunners for the Regulation S deal.

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