Wing Lung, Brunswick Rail, EP Energy do deals; 'better tone' for EM; pipeline fills again

By Christine Van Dusen

Atlanta, Oct. 25 - China's Wing Lung Bank, Russia's Brunswick Rail Finance and the Czech Republic's EP Energy sold notes on Thursday as emerging markets bonds got a boost from better-than-expected third-quarter economic data from the United Kingdom.

"Risk assets enjoyed a better tone," according to a report from Barclays. "Coupled with upbeat comments on underlying economic growth from two pivotal members of the [Monetary Policy Committee], we now think it is unlikely that there will be an extension of quantitative easing in November."

Also impacting the picture on Thursday were headlines out of the United States, where home sales and prices were a bit stronger than predicted.

Against this backdrop, several other issuers advanced deals on Thursday, including Chile, Brazil's Caixa Economica Federal, Guatemala's Banco Industrial SA, China Guangdong Nuclear Power Group, Turkey's Turkiye Petrol Rafinerileri AS (Tupras), Romania, Turkey's Finans Bank AS (Finansbank) and Russia's AK Bars Bank OJSC.

In its new deal, Hong Kong-based lender Wing Lung Bank priced a $200 million issue of 3½% notes due Nov. 7, 2022 at 99.578 to yield 3.593%, or Treasuries plus 280 basis points, a market source said.

Credit Suisse, RBS and UBS were the bookrunners for the Regulation S notes.

And Russian railcar operating lessor Brunswick Rail Finance sold $600 million 6½% notes due Nov. 1, 2017 at par to yield 6½%.

The notes were talked at a yield in the 6 5/8% area.

Goldman Sachs, RBI, UBS and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

EP Energy sells notes

In another new deal, Czech energy sector investment company EP Energy printed a €500 million issue of 5 7/8% notes due Nov. 1, 2019 at par to yield 5 7/8%, a market source said.

Erste Group, ING, JPMorgan, Societe Generale and Unicredit were the bookrunners for the Rule 144A and Regulation S deal.

The deal attracted about €1.8 billion in orders from 170 accounts, with 33% from Germany and Austria, 32% from the United Kingdom and Ireland, 13% from France, 6% from Switzerland, 5% from Central and Eastern Europe, 5% from Italy, 5% from Benelux nations and 1% from others.

Funds accounted for about 83%, insurance 8%, banks 7% and other 2%.

Chile whispers guidance

Chile gave price whispers for its planned two-tranche issue of $1.5 billion 10- and 30-year notes, a market source said.

The 10-year notes were whispered at Treasuries plus 75 bps. The 30-year notes were whispered at Treasuries plus 100 bps.

Bank of America Merrill Lynch, HSBC and JPMorgan are the bookrunners for the Securities and Exchange Commission-registered deal.

Proceeds will be used for general purposes of the government.

Caixa sets talk

In other deal-related news, Brazilian bank Caixa Economica Federal set price talk at Treasuries plus low-200 bps for its planned issue of five-year notes via Bank of America Merrill Lynch, Deutsche Bank and HSBC.

The Rule 144A and Regulation S notes are expected to price by the end of the week.

And Guatemalan lender Banco Industrial gave price guidance in the low-6% area for its planned issue of $300 million notes due in 2022, a market source said.

Bank of America Merrill Lynch and Citigroup are the bookrunners for the Rule 144A and Regulation S deal, which was marketed on a roadshow that wrapped up on Thursday.

Chinese corporate deal ahead

Also on Thursday, China Guangdong Nuclear Power Group set talk at the 3.85% to 4% area for a planned issue of renminbi-denominated notes due in 2015, a market source said.

ABC International, BOCI, China Development Bank and ICBC are the bookrunners for the Regulation S transaction.

Turkish petrochemical company Tupras set price talk at the Treasuries plus 350 bps area for its planned benchmark-sized issue of 51/2-year dollar notes.

Citigroup and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

Romania, Finansbank deals

Romania is planning an issue of up to €1.5 billion in bonds, a market source said.

And Turkish lender Finansbank set initial price talk at the 5 3/8% area for a five-year issue of dollar benchmark-sized notes, a market source said.

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

The notes are expected to price this week.

AK Bars roadshow planned

Russia's AK Bars Bank has mandated Credit Suisse and VTB Capital to arrange a roadshow starting on Oct. 29, a market source said.

The marketing trip will take place in Asia and Europe.

A dollar-denominated issue of Regulation S notes is expected to follow.

Ukraine bonds quiet

In trading, bonds from Ukraine remained mostly quiet ahead of this weekend's parliamentary elections, said Svitlana Rusakova of Dragon Capital.

The sovereign's 2020s were quoted at 103.25 bid, 104.25 offered, unchanged from the previous session. The 2021s were also unchanged, at 104.50 bid, 105.50 offered.

"Oschadbank continued to trade heavy at 95.5 bid, 96.5 offered," she said. "We saw some interest in Ukreximbank '15s at 97.5 bid, 99 offered."

Market-watchers are expected a victory for the ruling coalition in the Oct. 28 elections, Barclays said in a report.

"The elections have been a focal point for investors' hopes regarding economic policy reforms," the report said. "Although progress on key issues is highly uncertain, economic realities may force authorities to make some adjustments, including a weaker [currency]. We reiterate our underweight stance on Ukraine credit and expect the curve to steepen."

SK Telecom deal oversubscribed

Korean mobile phone operator SK Telecom Co. Ltd.'s recent issue of $700 million 2 1/8% notes due May 1, 2018 drew $5.3 billion in orders, a market source said.

The notes priced at 99.423 to yield 2.237%, or Treasuries plus 147.5 bps via Bank of America Merrill Lynch, Barclays, Credit Suisse, Deutsche Bank, HSBC and UBS in a Rule 144A and Regulation S deal.

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