New deals from Avianca, BOC Aviation, GuocoLand; spreads narrow; Sisecam, Batelco perform

By Christine Van Dusen

Atlanta, May 3 - Colombia's Avianca Holding SA, Singapore's BOC Aviation and Singapore's GuocoLand Ltd. priced notes on an active Friday for emerging markets assets, which saw tighter spreads, a positive tone and better liquidity.

"Busy start, with some jostling on some of the more liquid bonds," a London-based trader said.

The Markit iTraxx SovX CEEME ex-EU index spread on Friday narrowed 7 basis points to Treasuries plus 183 bps. The corporate index - seen Thursday at 228 bps over Treasuries - finished the week 5 bps tighter.

"The market is nicely set up for some more supply after the UK's long weekend," the London trader said.

In trading, bonds from Qatar were well offered while buyers were seen for Russia-based Alliance Oil, Vimpelcom and Russian Railways.

"The Middle East and North Africa are fairly quiet, in contrast to the action elsewhere," a London-based analyst said. "However, the market is steady at the open. Good demand continues for Gulf region bank paper."

She pointed specifically to Qatar National Bank, Abu Dhabi Commercial Bank and National Bank of Abu Dhabi.

"Saudi Electricity Co.'s 2043s are trading well still, at 106 mid now," she said.

And recent new issues had a good session on Friday.

The new 4¼% notes due 2020 from Turkey's Turkiye Sise ve Cam Fabrikalari AS (Sisecam), which priced at 99.265 to yield mid-swaps plus 310 bps, traded Friday at 1011/4.

"The new Sisecam seven-year is trading well," the London analyst said. "There have been buyers of Vakifbank and Albaraka Turk Katilim Bankasi."

The new issues of notes from Slovenia and Bahrain Telecommunications Co. BSC (Batelco) also performed well in trading.

And China's I.T Ltd. has mandated bookrunners for an upcoming deal.

Slovenia performs

Slovenia's two-tranche $3.5 billion deal included $1 billion 4¾% notes due in 2018 that priced at 99.124 and $2.5 billion 5.85% notes due in 2023 that priced at 98.884.

"Slovenia's new issues are performing very strongly, with the 10-year trading up about 4 points and the 5-year up about 2 points," the analyst said.

The sovereign previously delayed a similar deal as Moody's Investors Service downgraded Slovenia's credit rating to junk.

Batelco 'steady'

Bahrain-based Batelco's recent $650 million issue of 4¼% notes due 2020 that priced at 99.45 was sighted Friday at 100½ bid, 100 5/8 offered.

"Batelco is steady," the analyst said.

BNP Paribas and Citigroup were the bookrunners for the Regulation S-only deal.

"A resounding success, this one," a trader said.

Avianca sells bonds

In its new deal, Colombia's Avianca Holding priced a $300 million issue of notes due 2020 with a coupon of 8 3/8%, according to a company announcement.

Citigroup and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

No other pricing details were immediately available on Friday.

Avianca is a Bogota, Colombia-based airline holding company.

BOC, GuocoLand do deals

Singapore-based aircraft leasing company BOC Aviation priced a $150 million increase of its existing 4 3/8% notes due 2023 to yield Treasuries plus 263 bps, a market source said.

BOCI and HSBC were the bookrunners for the Regulation S deal.

The issue's existing size was $350 million.

And Singapore-based investment holding company GuocoLand sold S$125 million 4.1% notes due 2020 at par to yield 4.1% via Standard Chartered Bank in a Regulation S deal.

Fidelity Bank prices notes

These new deals followed the late-Thursday pricing of Nigeria-based Fidelity Bank plc's $300 million issue of 6 7/8% notes due 2018.

The notes came to the market at 99.48 to yield Treasuries plus 635 bps, a market source said.

Citigroup and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

I.T picks bookrunners

China-based retail investment holding company I.T Ltd. has mandated HSBC and Standard Chartered Bank as bookrunners for an issue of renminbi notes that will be marketed during a roadshow next week, a market source said.

The roadshow will begin on Monday.

A Regulation S deal is expected to follow.

OVL oversubscribed

The recent two-tranche issue of $800 million notes due 2018 and 2023 from India-based oil and gas company ONGC Videsh Ltd. (OVL) drew a fairly sizeable order book, a market source said.

The deal included $300 million 2½% notes due in 2018 that priced at 99.655 to yield 2.574%, or Treasuries plus 190 bps. The tranche attracted $1.1 billion in orders from 100 accounts, with 72% from Asia, 18% from Europe and 10% from the United States offshore.

Asset and fund managers picked up 60%, banks 23%, insurance 9%, private banks 5% and sovereign wealth funds 3%.

The second tranche of $500 million 3¾% notes due in 2023 priced at 99.95 to yield 3.756%, or Treasuries plus 210 bps. This tranche drew $1.8 billion from 131 accounts, with 69% from Asia, 27% from Europe and 4% from the United States offshore.

Asset and fund managers accounted for 54%, banks 25%, insurance 17% and private banks 4%.

Citigroup, Deutsche Bank and RBS were the bookrunners for the Regulation S-only deal.

Bond funds see inflows

In other news, flows into bond funds during the week ended May 1 totaled a "record-setting" $10.3 billion, according to a report from data-tracker EPFR Global.

Of that, $1.7 billion went into emerging markets bond funds, with $539 million into hard-currency funds and $267 million into mixed funds.

About $2 billion of the total $10.3 billion was tied to a single fund launch.

"Fund flows this week were strong," a trader said.

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