Mubadala, KazMunyGas price before long weekend; Saudi Arabia expected Thursday; PDVSA up

By Colin Hanner

Chicago, April 12 – With a sizable portion of the world market eyeing a long weekend, new issues out of the Middle East were keeping investors on their toes in emerging markets on Wednesday.

Of those, KSA Sukuk Ltd., obliging through Saudi Arabia, is expected to price five- and 10-year fixed-rate notes on Thursday, a market source said.

Yield has yet to be confirmed as of press time, though the five-year notes’ initial spread guidance started at 115 basis points and the 10-year deal at 155 bps, around “20 bps back of the convention curve,” a market source said.

On Wednesday morning, a market source said both of those deals tightened by 10 bps each, and by Wednesday afternoon, initial spread guidance was 100 bps for the five-year notes and 140 bps for the 10-year notes.

The source said books for the deals were over $25 billion together.

“[It is going to] be big,” the market source said.

“The better sentiment in the oil market and a generally positive market backdrop for EM credit is also beneficial for the Saudi” deal, another market source said.

Citibank, HSBC, JPMorgan, BNP Paribas, Deutsche Bank and NCB Capital are stabilizing managers for the deal.

“This was the rush, really,” a market source said of the upcoming Saudi deal. “People tried to choreograph themselves around that. That was the size driver.”

With Mubadala Development Co. PJSC and KazMunayGas pricing on Tuesday, there is “lots of supply” in the primary market, a market source said.

Mubadala prices two tranches

Abu Dhabi’s Mubadala priced $1.5 billion of notes due 2024 and 2029 on Tuesday, a market source said.

The company priced $850 million of 3% seven-year notes at 99.375 to yield 3.1%.

A $650 million tranche of 3¾% 12-year notes priced at 99.981 to yield 3.752%.

The book was oversubscribed at $5.5 billion, a market source said.

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

Saudi, Oman sovereigns

Saudi Arabia sovereigns were little changed during Wednesday’s session, a market source said.

The 2 3/8% notes due 2021 were quoted with a 98 bid, 98¼ offer in early morning trading and traded less than 1/10 point higher at the end of the session.

The 3¼% notes due 2026 were quoted with a 97.23 bid, 97.41 offer in the early morning and were unchanged at the end of the session.

Oman’s 3 5/8% notes due 2021 were quoted with a 101.37 bid, 101.62 offer in the morning, drifting down less than 1/10 point as the session came to a close.

And the 3 7/8% notes due 2022 were quoted with a 101¼ bid, 101½ offer, seeing similar declines as the 3 5/8% notes in the afternoon.

KazMunayGas details sale

KazMunayGas priced $2.75 billion of notes due 2022, 2027 and 2047 on Tuesday, a market source said.

The company priced $500 million of 3 7/8% five-year notes at 99.663 to yield 3.95%.

A $1 billion tranche of 4¾% 10-year notes priced at 99.02 to yield 4 7/8%.

And KazMunayGas sold $1.25 billion of 5¾% 30-year notes to yield 5 7/8%.

Joint bookrunners for the Rule 144A and Regulation S deal are Citigroup, Deutsche Bank, UBS Investment Bank, Halyk Finance, Euroclear Bank, Clearstream Banking SA and SkyBridge Invest.

KazMunayGas is an Astana, Kazakhstan-based state-owned oil and gas company.

PDVSA will make payment

The swirl of doubt circling Petroleos de Venezuela SA and whether it would pay a $2.1 billion in principal and interest to investors was put to rest early on Wednesday afternoon.

Payments were made, and bonds were higher as a result.

The 8½% notes due 2017 were quoted with an 86 bid, 87 offer, a 1¼-point increase from Tuesday’s levels.

The 9% notes due 2021 were unchanged with a 52½ bid, 53½ offer, up 1½ points.

And the 6% notes due 2024 were up 1½ points to a 39 bid, 40 offer.

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