Primary could soon see Bharat Petroleum, DIB, Warba, Fibria; EM sees demand in trading

By Christine Van Dusen

Atlanta, Jan. 4 – The primary market perked up on Wednesday – with issuers like India’s Bharat Petroleum Corp. Ltd., Bahrain’s Gulf International Bank BSC and Dubai Islamic Bank PJSC lining up deals – while investors continued to await the December minutes from the Federal Open Market Committee.

Also advancing new issues were Kuwait’s Warba Bank, Philippines’ Asian Development Bank (ADB) and Brazil’s Fibria Celulosa SA.

“Markets kicked off 2017 in a solid fashion, supported by fairly strong macro reads across the globe,” a London-based analyst said. “This comes in stark contrast to last year, when concerns about China and the renminbi dominated market sentiment. Despite the global political uncertainties, investors are relying on a governmental backstop.”

Investors were keeping an eye on Venezuela, after the sovereign made a $5 billion placement to its central bank and state-run Banco de Venezuela.

“While the Finance Ministry confirmed the transaction, the purpose was unclear, with some arguing that the deal could provide funds to pay creditors and suppliers or guarantee loan payments to China,” the analyst said.

Demand was strong for emerging markets assets, overall, a London-based trader said.

“Textbook start to the year with demand pretty much across the board over the opening two days of proceedings,” he said. “Once again we find ourselves in a very resilient, technical and supportive market.”

Looking to the Middle East, bonds from Bahrain traded “very well,” he said.

The sovereign’s 2024 was a “little rich on the curve,” he said. “A slew of buyers on long-dated names. The market remains very well supported, perhaps some sovereign paper around on Qatar 2021 2026 and 2046s into the close.”

Oman’s 2021s and 2026s have moved 5 basis points and 13 bps tighter, respectively, on the month.

South Korea, Israel may issue

Market sources on Wednesday were whispering about a possible roadshow from South Korea and a long-dated, euro-denominated deal from Israel.

“Primary market activity is showing signs of an early revival this year,” the analyst said. “While Asia is likely to take the lead as usual, the Middle East and North Africa will also remain a hotspot.”

Bharat sets roadshow

For its new deal, India’s Bharat Petroleum will set out on Thursday for a roadshow to market a dollar-denominated issue of notes, a market source said.

Citigroup and Standard Chartered Bank are the joint global coordinators and – with DBS Bank, MUFG and SBI Capital Markets – the joint bookrunners and joint lead managers for the Regulation S deal.

The roadshow will take place in the Asia, the Middle East and Europe.

The notes will be issued by indirect subsidiary BPRL International Singapore Pte. Ltd.

Bharat Petroleum is an oil and gas company based in Mumbai.

GIB mandates bookrunners

Bahrain’s Gulf International Bank has mandated Citigroup, HSBC, JPMorgan, Mizuho Securities, National Bank of Abu Dhabi and Standard Chartered as the bookrunners for a new issue of notes, a market source said.

The deal is expected to be benchmark-sized and dollar-denominated.

Other details were not immediately available on Wednesday.

DIB seeks banks

Dubai Islamic Bank is looking for bookrunners for a potential issue of dollar-denominated Islamic bonds, a market source said.

The deal is expected to be benchmark-sized.

Other details were not immediately available on Wednesday.

Warba picks leads

Kuwait’s Warba Bank has mandated nine banks for up to $250 million of Islamic bonds, a market source said.

Ajman Bank, Bank ABC, Emirates NBD, Standard Chartered, Abu Dhabi Islamic Bank, Kamco Investment Co., Kuwait Finance House, Noor Bank and Warba Bank are leading the Regulation S deal.

The proceeds will be used to increase the lender’s capital reserves.

Dollar notes ahead from ADB

Philippines’ Asian Development Bank (ADB) is planning to issue benchmark-sized and dollar-denominated notes due in three and 10 years, according to a company announcement.

JPMorgan, Citigroup, Goldman Sachs and Nomura International are the bookrunners for the deal.

ADB, based in Manila, focuses on reducing poverty in Asia and the Pacific through economic growth, environmentally sustainable growth and regional integration.

Fibria goes green

Brazil’s Fibria – via Fibria Overseas Finance Ltd. – plans to issue dollar-denominated green bonds, according to a company filing.

BNP Paribas, BofA Merrill Lynch, Citigroup, HSBC and JPMorgan are the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for eligible green projects.

Fibria is a Sao Paulo-based pulp and paper company.

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