Sound Global, Sinopec, DBS, Abu Dhabi bank sell notes on solid but slow day for EM assets

By Christine Van Dusen and Aleesia Forni

Atlanta, Aug. 6 - Sound Global Ltd., China Petroleum & Chemical Corp. (Sinopec), DBS Bank and National Bank of Abu Dhabi sold notes on a positive, solid Monday for emerging markets assets, even as the summertime slowdown took its toll on volumes.

"It's relatively light," a New York-based market source said. "I would hope that the level of activity picks up slightly throughout the week. It seems like the market is open for the right guys."

Indeed, price moves were limited during the European morning, according to a report from Barclays Capital.

"We believe the rate sell-off on Friday is unlikely to continue, as we see this market trading range-bound until concrete news out of Europe emerges," the report said.

The bank is recommending tactical trades instead of duration views and suggests aggressive buying if safe haven yields rise another 10 basis points to 15 bps.

"While central banks did not act this week, we think the likelihood of further central bank moves remains high, particularly in Europe," Barclays said.

But even if the central banks do make moves, emerging markets assets may not react much, a New York-based market source said.

"These things come and go without the world coming to an end," he said.

In its new deal, Sinopec priced a $500 million tap of its 3.9% notes due May 17, 2022 at 107.579 to yield 2.99%, or Treasuries plus 145 bps, via Goldman Sachs, Morgan Stanley, CCB International and Mizuho Securities in a Regulation S deal.

The notes priced in line with talk, set at the Treasuries plus 145 bps area.

Proceeds will be used for the general corporate purposes of Sinopec's overseas businesses and for funding the overseas expansion plan.

As of midday on Monday, the books were in excess of $2.5 billion.

The original $1 billion issue priced at Treasuries plus 210 bps in May.

Sound Global 'well received'

Also from China, Beijing-based water and wastewater treatment provider Sound Global priced a $150 million issue of 11 7/8% notes due Aug. 10, 2017 at 99.54 to yield 12%, a syndicate source said.

HSBC and Deutsche Bank were bookrunners the Regulation S notes, which are non-callable for three years.

Proceeds will be used to invest in projects, to refinance bonds, for working capital and for corporate purposes.

"Sound Global was well received," according to a source close to the deal. "It had about a $350 million book for a $150 million trade. It was a five-year deal that came at 12%, so that's one of the first true, true high-yield situations we've seen in a while, which is encouraging."

Abu Dhabi prints notes

Also on Monday, National Bank of Abu Dhabi sold $750 million of 3% notes due Aug. 13, 2019 at 99.731 to yield mid-swaps plus 180 bps, a market source said.

The notes priced tighter than talk, set at the mid-swaps plus 200 bps area.

Citigroup, JPMorgan, Standard Chartered and National Bank of Abu Dhabi were the bookrunners for the Regulation S-only deal.

"I have to imagine [issuance] could pick up a little bit as we get into tomorrow and the rest of the week," a New York-based syndicate source said. "The tone feels OK, and arguably, some of the people that have stuff to do may want to get it done before they go on summer break."

DBS does deal

Singapore-based regional lender DBS Bank sold S$1 billion 3.1% notes due February 2023 at par to yield 3.1%, a market source said.

DBS Bank was the bookrunner for the Regulation S notes, which are callable in February 2018.

Market-watchers were also whispering Monday about possible ruble bonds from Orient Express Bank and perpetual notes from Singapore-based water company Hyflux.

"Away from that, it looks like it's really, really quiet," a New York-based syndicate source said.

Poland, Czech Republic perform

In trading, local currency bonds from Poland continue to perform well, according to a report from Erste Group Research.

The notes had tightened Friday by about 10 bps.

"Czech Republic local currency bonds also demonstrated strong relative performance with the short end of the curve outperforming the long end," the report said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.