Primary hosts Ecopetrol, Arcelik; Ukraine, Russia in focus; Middle East issuers set talk

By Christine Van Dusen

Atlanta, Sept. 9 – Colombia’s Ecopetrol SA and Turkey’s Arcelik AS sold notes on Tuesday as the European Union considered further sanctions against Russia and investors watched Ukraine to see if a ceasefire would hold.

“We expect many European countries would prefer for sanctions not to be introduced, given the possible retaliatory measures from Russia, so if the ceasefire largely holds for the next few days, we see a high chance these sanctions could be dropped,” a London-based analyst said. “Overall, Russia is opening largely unchanged here this morning.”

From Ukraine, corporates have seen little action so far this week, said Svitlana Rusakova of Dragon Capital.

“The market remained very cautious and fearful of the ceasefire in eastern Ukraine being repeatedly broken,” she said.

With some selling of sovereign bonds, the curve has moved between 1 point and 1¾ points lower.

“Buyers remained very reluctant to step in,” she said.

Elsewhere in emerging markets, credit default swaps spreads moved out about 3 basis points for Turkey, though cash bonds fared better, a source said.

Turkey’s Finans Bank AS (Finansbank), in particular, was a standout: The lender’s 2019s are 97 bps tighter on the month, he said.

Looking to the Middle East, trading was busy and spreads tightened, a London-based trader said.

And from Latin America, many corporate names suffered, including Brazilian corporates, which took a hit after Moody’s Investors Service revised ratings for Brazil.

Mexico’s Cemex SAB de CV saw its recent new issue of notes trade below 98¾ with three weeks left in the tender offer, a New York-based trader said.

Most of the day’s volume focused on spread-based credits like Brazil-based Odebrecht SA, he said.

Croatia tightens

In other trading on Tuesday, Croatia’s notes were spotted between 101 1/8 and 101 3/8, the London-based trader said.

The 2024s were trading between 107½ and 107 7/8, he said.

“The 2021 is the best-performing bond, month-to-date,” he said. “It’s tighter by 83 bps.”

New deal from Ecopetrol

Colombia-based petroleum company Ecopetrol priced $1.2 billion 4 1/8% notes due Jan. 16, 2025 at 99.001 to yield Treasuries plus 175 bps, a market source said.

Citigroup and JPMorgan are the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes, including capital expenditures.

Arcelik sells notes

Turkey-based household appliances manufacturer Arcelik priced €350 million 3 7/8% notes due Sept. 16, 2021 at 99.25 to yield 4%, or mid-swaps plus 321 bps, a market source said.

The notes were talked at a yield in the 4 1/8% area.

BNP Paribas, Citigroup and HSBC were the bookrunners for the Regulation S deal.

ADCB launches bonds

Abu Dhabi Commercial Bank PJSC launched a $600 million issue of five-year notes at a spread of 87.5 bps over mid-swaps, a market source said.

The notes were talked at a spread in the 90 bps area.

“That’s circa 10 bps to 15 bps cheap to the curve,” the London analyst said.

Barclays, ING, JPMorgan and Mizuho Securities are the bookrunners for the Regulation S deal.

Bahrain talks notes

Bahrain set initial talk in the low-6% area for its upcoming issue of dollar-denominated issue of 30-year notes, a market source said.

Citigroup, Gulf International Bank, MUFG and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The notes are expected to price on Wednesday.

Guidance from Sharjah

The Emirate of Sharjah set talk in the mid-swaps plus 120 bps area for its upcoming issue of benchmark-sized and dollar-denominated notes due in 10 years (A3/A/), a market source said.

HSBC, National Bank of Abu Dhabi and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The notes are expected to price on Wednesday.

Talk from Dubai corporate

Dubai’s Emirates NBD set talk in the mid-6% area for its upcoming issue of dollar-denominated and benchmark-sized perpetual notes, a market source said.

The notes are expected to price on Wednesday.

Morgan Stanley and Standard Chartered Bank are the joint global coordinators, and Citigroup, Commerzbank, Deutsche Bank, Emirates NBD Capital, Morgan Stanley and Standard Chartered Bank are the joint lead managers for the Regulation S deal.

The notes will be non-callable for six years.

Emirates NBD is a provider of corporate, consumer, treasury and investment banking and asset management services.

Poland on roadshow

Poland is on a roadshow in Zurich, a market source said.

An issue of notes may follow.

No other details were immediately available on Tuesday.

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