New issue from Kexim; risk-on session for EM bonds; Dubai gets attention; roadshows ahead

By Christine Van Dusen

Atlanta, Nov. 24 – Korea Export-Import Bank (Kexim) printed notes during a risk-on Monday for emerging markets assets, following last week’s rate cut in China and recent dovish comments from the European Central Bank.

Russia’s credit default swaps spreads tightened 8 basis points on Monday, a London-based analyst said.

“The tone is also being helped by higher oil prices,” he said. “Corporates are also trading tighter, like the sovereign, but bank flows are more limited.”

This positivity occurred even as violence increased in Ukraine, he said.

Credit default swaps spreads for Turkey narrowed 2 bps on Monday after officials from the sovereign and the United States met to talk about the situation in Syria.

“The two sides remain divided,” the analyst said. “There was, however, a suggestion from the U.S. to create safe zones in Syria for rebels, which both sides could agree on, but negotiations are ongoing.”

Spreads for bonds from the Middle East tightened overall, but just slightly, he said.

This was influenced by the weekend’s election in Bahrain, where the Shia-led opposition boycotted and some violent clashes erupted.

Even so, the sovereign’s 2022s and 2023s rallied to catch up with the new issue of 4% 2021 notes that Bahrain Mumtalakat Holding Co. BSC priced at 99.043.

Dubai’s bonds saw most of the activity on Monday, a London-based trader said, with investors showing interest in DPWorld.

In deal-related news, roadshows were set for Pakistan, India’s Lodha Developers Private Ltd. and India’s Reliance Communications Ltd. while China’s Beijing Capital Land Ltd. mandated bookrunners.

Dubai names active

In other trading from the Middle East, Emirates NBD’s notes saw demand on Monday, too, while Dubai Holding’s 2017s moved out to 370 bps over on the bid side, the London trader said.

The recent notes from Dubai Aviation Corp. (FlyDubai) – 3.776% notes due 2019 that priced at par to yield 3.776% – closed Monday at par bid, 100.05 offered.

“Done some good work in that context but cannot seem to muster any sort of rally,” he said.

Bonds from Qatar and its corporates were a “mixed bag,” he said.

Lat-Am in focus

From Latin America, corporates put in a slow and mostly uneventful session on Monday, a New York-based trader said.

Notes from Brazil-based Petroleo Brasileiro SA traded tighter during the morning, only to end up 5 bps wider on the day as the company grappled with a corruption scandal.

Vale SA also tightened earlier in the day but held on to some of its gains.

“Volumes on both were much lower than normal,” he said.

Bonds from Odebrecht SA traded off Friday’s rally by about a point, he said, while Mexico’s Cemex SAB de CV moved higher for the first time in many sessions.

Kexim sells notes

Korea’s Kexim priced a two-tranche issue of RMB 1 billion notes due in 2017 and 2019, a market source said.

The deal included RMB 300 million 3.35% notes due Nov. 28, 2017 that priced at par to yield 3.35%.

The RMB 700 million 7.7% notes due Nov. 29, 2019 priced at par to yield 7.7%.

UBS was the sole bookrunner for the Regulation S deal.

Korean power company sets talk

Korea East West Power set talk in the Treasuries plus 115 bps area for its upcoming issue of dollar-denominated and benchmark-sized notes due in 5½ years, a market source said.

Barclays, BNP Paribas, BofA Merrill Lynch, Citigroup, Credit Suisse, HSBC and UBS are the bookrunners for the Rule 144A and Regulation S deal.

The Seoul-based issuer is a wholly owned unit of state-owned Korea Electric Power Corp.

Pakistan on roadshow

Pakistan on Monday commenced a roadshow for a dollar-denominated issue of benchmark-sized Islamic bonds, a market source said.

Citigroup, Deutsche Bank, Dubai Islamic Bank and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

Lodha plans roadshow

India’s Lodha Developers will set out on Tuesday for a roadshow to market a dollar-denominated issue of notes, a market source said.

JPMorgan and BofA Merrill Lynch are the bookrunners for the Regulation S marketing trip, which will be held in Singapore, Hong Kong and London.

The real estate developer is based in Mumbai.

Roadshow for Reliance

India’s Reliance Communications will depart on Tuesday for a roadshow to market a possible issue of notes, a market source said.

Deutsche Bank and Standard Chartered Bank are arranging the marketing trip, which will be held in Asia and Europe.

Reliance is a telecommunications company based in Navi Mumbai, India.

Beijing Capital mandates banks

China’s Beijing Capital Land has mandated HSBC, DBS Bank, ICBC International and Standard Chartered Bank as the bookrunners for a dollar-denominated issue of perpetual notes, a market source said.

The notes will be Regulation S-registered.

The integrated property developer is based in Beijing.

MBank deal oversubscribed

The final book for Poland-based mBank’s €500 million 2% notes due Nov. 26, 2021 was €800 million from 75 accounts, a market source said.

The notes priced last week at 99.413 to yield 2.093%, or mid-swaps plus 145 bps with Barclays, Commerzbank, Credit Suisse and JPMorgan.

About 40% of the orders came from Germany and Austria, 24% from the United Kingdom, 14% from France, 9% from Poland and 9% from Switzerland.

Asset managers picked up 56%, banks 20%, hedge funds 9%, insurers and pension funds 8%, private banks 4% and others 3%.

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