New deals from Franshion, Gazprombank, Slovenia, Anadolu Efes, CFG; EM trading lightens

By Christine Van Dusen

Atlanta, Oct. 19 - Franshion Properties (China) Ltd., Russia's Gazprombank, Slovenia, Turkey's Anadolu Efes Biracilik Ve Malt San and Caribbean Financial Group Holdings LP sold notes on Friday, adding to the week's slew of new deals from emerging markets issuers.

"Still intensive activity and huge demand in eurobond primary market," according to a report from UFS Investment Co.

This came as emerging markets bond funds saw record weekly inflows, according to a report from EPFR Global.

The funds took in $1.4 billion for the week ended Oct. 17, bringing the year-to-date total up to $43.67 billion.

The secondary market, however, was not as active on Friday.

"Corporate bond market showed mixed dynamics amid decreased trading volumes," UFS said in its report.

And trading in sovereign bonds - particularly from emerging Europe - was light on Friday, given the recent spate of new issuance, said Svitlana Rusakova of Dragon Capital.

The increased supply was "easily absorbed," she said.

Ukraine's 2020s were quoted at 104.50 bid, 105.50 offered, and its 2020s were seen at 105.25 bid, 106.25 offered.

Two-way flows were reported for Privatbank's 2015s at 93.75 bid, 95.25 offered. And Oschadbank was quiet, seen at 96.75 bid, 97.75 offered, she said.

Sentiment gets a boost

Investors were focused more on the European Council meeting, according to a report from Barclays.

"European leaders agreed yesterday to set up a single euro area-wide banking supervisor in 2013," the report said. "Note that there is no agreement yet over the role of the European Stability Mechanism on bank recapitalizations. Significant progress has also been made - on paper at least - on a roadmap towards a more integrated union."

Investor sentiment has also been boosted by better economic news, Barclays said.

"Economic data provided some support to asset markets overnight, and we think risk sentiment should remain supported, particularly given positive news from China and the US," the report said.

Polish yields fall

In other trading on Friday, bonds from Poland were grappling with the previous day's drop.

"Yields on five-year Polish government bonds hit a record low yesterday following comments from ... a member of the Monetary Policy Council that recent weak industrial output data indicate that a 'more decisive' rate cut is needed next month," according to a report from Erste Group Research.

Franshion sells notes

In its new deal, Hong Kong-based real estate company Franshion Properties sold $500 million 4.7% notes due Oct. 26, 2017 at par to yield 4.7%, a market source said.

RBS, Deutsche Bank, JPMorgan and Standard Chartered were the bookrunners for the Regulation S deal.

Proceeds will be used to refinance debt, for working capital and for general corporate purposes.

The notes will be issued through the company's Franshion Investment Ltd. subsidiary.

Slovenia prices bonds

Slovenia priced $2.25 billion 5½% notes due Oct. 26, 2022 at 98.491, according to a filing from the sovereign.

The notes were talked at the low-6% area.

BNP Paribas, Deutsche Bank and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Gazprombank prints notes

Lender Gazprombank priced a $1 billion issue of 7 7/8% perpetual notes at par to yield Treasuries plus 711 basis points, tighter than talk.

Credit Suisse, GPB Financial Services, Goldman Sachs and HSBC were the bookrunners for the Regulation S deal.

The notes are non-callable for five years and are being issued through special-purpose vehicle GPB Eurobond Finance plc.

"Gazprombank is completing its perpetual eurobond placement amid huge excessive demand," UFS said.

CFG sells bonds

In another new deal, Caribbean Financial Group priced $178 million 11½% notes due Nov. 15, 2019 at 98 to yield 11.926%, a market source said.

The notes, via bookrunner Jefferies, were talked at 11½%.

Proceeds from the Rule 144A and Regulation S notes will be used to refinance debt.

The notes were issued via the CFG Holdings Ltd. and CFG Finance LLC entities.

Caribbean Finance is a Guaynabo, Puerto Rico-based consumer finance company operating in Panama, Aruba, Curacao, Trinidad & Tobago, St. Maarten and Bonaire.

Anadolu Efes does deal

And Turkey-based beverage company Anadolu Efes priced $500 million 3 3/8% notes due Nov. 1, 2022 to yield Treasuries plus 175 bps, according to a source close to the deal.

The notes were talked at the Treasuries plus 225 bps area a market source said.

Bank of America Merrill Lynch, HSBC, JPMorgan and RBS were the bookrunners for the Rule 144A and Regulation S deal.

Sberbank notes struggle

The recent notes from Russia's Sberbank struggled in the secondary market on Friday, according to a report from UFS.

The lender on Thursday priced a $2 billion issue of 5 1/8% notes due in 2022 at par to yield 5 1/8% via HSBC, JPMorgan and Sberbank in a Rule 144A and Regulation S deal.

"Sberbank placed a subordinated eurobond with no premium," UFS said. "Unattractive in the secondary market."

Banks plan roadshows

Turkey-based lender Finans Bank AS (Finansbank) is planning a roadshow starting Oct. 23 for its benchmark-sized issue of dollar-denominated notes, a market source said.

Citigroup, Morgan Stanley, Standard Chartered and RBS are the bookrunners for the Rule 144A and Regulation S deal.

And Brazilian bank Caixa Economica Federal has mandated Bank of America Merrill Lynch, Deutsche Bank and HSBC for a roadshow starting Oct. 23, a market source said.

No other details were immediately available Friday.

Greece remains riskiest

In other emerging markets news, Greece was once again the riskiest sovereign in the third quarter of this year, according to the latest CMA Global Sovereign Credit Risk report.

Second on the list was Cyprus, followed by Argentina, Pakistan, Venezuela and Ukraine.

Despite their risky status, most of the sovereigns on the list saw credit default swap spreads tighten. Slovenia, Lebanon and Costa Rica tightened the least.

Only Tunisia widened significantly, CMA said.

On the list of least-risky sovereigns, Hong Kong was the only emerging market.

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