India Exim, Korea Finance print bonds amid poor liquidity; Unibanco notes oversubscribed

By Christine Van Dusen

Atlanta, July 31 - Export Import Bank of India and Korea Finance Corp. sold notes on a Tuesday that saw poor liquidity as investors focused less on emerging markets assets and more on Ramadan, the Olympic Games, the ongoing meeting of the Federal Reserve and the upcoming gathering of officials from the European Central Bank.

Even a negative report about the U.S. economy, showing that consumer spending suffered a greater-than-expected drop in June, didn't do much to spur activity one way or another on Tuesday.

Still, debt from issuers like Qatar and Abu Dhabi-based International Petroleum Investment Co. (IPIC) managed to finish July on a good note.

"All told it's been a pretty solid month," a London-based trader said. "The long end is maybe pausing after a stunning move."

Qatar's 2042 bonds were trading at z-spread plus 185 basis points mid, while IPIC's 2041 bonds were trading with a 131 handle, he said.

"It's painless and pointless being short, though as this month shows, one would have been carried out," he said. "We did see some bottom fishers lurking this week."

In its new deal, India's Exim priced a $500 million issue of 4% fixed-rate senior notes due 2017 at 99.365 to yield 4.142%, or Treasuries plus 355 bps, according to a syndicate source.

The notes - issued under the Mumbai-based lender's $2.5 billion euro medium-term note program - priced on top of talk via bookrunners Standard Chartered and Citigroup.

Korea Finance prices notes

Tuesday also saw Seoul-based Korea Finance price a $500 million issue of 2¼% notes due Aug. 7, 2017 at 99.251 to yield 2.41%, or Treasuries plus 180 bps, a market source said.

The notes priced at the high end of talk, set at Treasuries plus 175 bps to 180 bps.

Bank of America Merrill Lynch, Deutsche Bank, HSBC, Korea Development Bank and Morgan Stanley were the bookrunners for the Securities and Exchange Commission-registered deal.

Proceeds will be used for general operations, including extending foreign currency loans, according to a company filing.

Unibanco deal oversubscribed

In other deal-related news on Tuesday, the final book for Brazil-based lender Itau Unibanco Holding SA's recent $1.25 billion 5½% notes due Aug. 6, 2022 was about $3.3 billion with more than 200 accounts involved, a market source said.

The notes priced late Monday at par to yield 5½%, or Treasuries plus 399.6 bps, after being talked at the mid- to high-5% area.

Itau, JPMorgan and Standard Chartered were the bookrunners for the Rule 144A and Regulation S deal.

Abu Dhabi tightens

In trading, Abu Dhabi's 2019 bonds were 25 bps tighter on the week as the redemption of the sovereign's 5½% 2012 notes saw investors scrambling for the seven-year notes, a trader said.

"Well, you thought it was trading rich 20 bps ago," he said. "They're lifted in the Street now at 127.85. That might look rich, but despite the high dollar price versus the peer group, it can arguably still tighten and will nicely if the 10-year Treasury heads back to 1 5/8%."

Dubai's DPWorld saw its 2017 notes trading Tuesday at 108.75 bid, 109.50 offered, while its 2037 notes were seen at 104.75 bid, 105.75 offered.

Emirates, Lebanon lag

Some other Dubai names lagged on Tuesday.

"Emirates airline's 2016s are stuck here, and Dubai Holding's 2014s which, despite moving tighter on the month and having a few supporters, feels well offered for some reason," a trader said.

Also underperforming on Tuesday was Lebanon.

"That seems to have curled up to take a very long nap," he said.

Qatar notes somewhat active

The $4 billion sukuk issue from Qatar funding vehicle SoQ Sukuk was fairly active in trading on Tuesday.

The deal included $2 billion 2.099% notes due 2018 and $2 billion 3.241% notes due 2023 that both priced at par.

The 2018 notes traded Tuesday at 100.47 bid, 100.62 offered after being quoted Monday at 100.50 bid, 100.65 offered. The 2023 notes were quoted Tuesday at 102.40 bid, 102.70 offered after Monday's level of 102.57 bid, 102.97 offered.

Barwa Bank, Deutsche Bank, HSBC, QInvest and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Offers on Qtel rare

Qatar's Qtel International's 2021 notes were seen at 109.75 bid, 110.75 offered. The company's 2025 notes were quoted at 110.25 bid, 111.75 offered.

"Offers are very hard to come by on Qtel's 2021s and 2025s," he said.

And the 2017 notes from Saudi Electric Co. that traded last week at 101.62 bid, 102.12 offered opened Tuesday at 102 bid, 102.75 offered. Later on Tuesday, the notes were quoted back fat 102 bid, 102.75 offered.

Meanwhile, South Africa's five-year credit default swaps were trading Tuesday at 129 bid, 134 offered.

"South Africa is a solid credit at the moment, and it's a very sound monthly effort," a trader said.

Jafza well bid

The recent deal from Dubai's Jebel Ali Free Zone (Jafza) - a $650 million issue of 7% notes due 2019 that also priced at par - was trading Tuesday at 106.50 bid, 107.25 offered.

On Monday, the notes opened at 106 bid, 107 offered.

Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Citigroup, Dubai Islamic Bank, Emirates NBD, National Bank of Abu Dhabi and Standard Chartered were the bookrunners for the Regulation S deal.

"Jafza, Emaar Properties and Majid al Futtaim Holdings are super well bid," a trader said. "Jafza is almost 40 bps tighter on the week."

Aleesia Forni contributed to this article.

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