Limited trading focuses on TAQA, Qtel, Morocco; primary market shuttered for holidays

By Christine Van Dusen

Atlanta, Dec. 20 - Spreads inched wider on Thursday for emerging markets assets as little development was reported in the United States' fiscal-cliff talks and investors and issuers moved into the holiday mindset.

The Markit iTraxx SovX index spread started Thursday 2 basis points wider while the corporate index moved out 1 bp.

The primary market remained silent and volumes were thin, given the upcoming Christmas and New Year's holidays.

In the trading that did occur, the recent notes due 2023 from Abu Dhabi National Energy Co. (TAQA) received some attention on Thursday.

They traded at 102.12 bid, 102.68 offered after Wednesday's levels of 102 bid, 102½ offered. The notes priced at 99.404.

The deal also included $750 million 2½% notes due 2018 that priced at 99.483, which traded Thursday at 101 bid, 101.35 offered.

BNP Paribas, Citigroup, HSBC and Standard Chartered were the bookrunners for the deal.

Also from the Middle East, the recent $1 billion issue of 3¼% notes due 2023 from Qatar Telecom QSC (Qtel) that priced at 98.721 through subsidiary Qtel International Finance Ltd. traded Thursday at 99.85 bid, 100.05 offered, a trader said.

On Wednesday the notes were seen at 99.80 bid, 100.13 offered.

Barclays, HSBC, Mitsubishi UFJ, Mizuho Securities, Morgan Stanley and QNB Capital were the bookrunners for the Rule 144A and Regulation S transaction.

DEWA 2015s unchanged

Dubai Electricity and Water Authority's 2015 notes traded Thursday at 113 bid, 113¾ offered, unchanged from Wednesday.

DEWA's 2020s were seen at 123.12 bid, 123.62 offered after Wednesday's levels of 123.12 bid, 123.87 offered.

The 2017 notes from Saudi Electricity Co. were quoted Thursday at 103.18 bid, 103.43 offered after trading Wednesday at 103.20 bid, 103½ offered.

The company's 2022 notes, which traded Wednesday at 108.20 bid, 108½ offered, were seen Thursday at 108.10 bid, 108.35 offered.

Morocco in focus

From Africa, Morocco's recent issue of 4¼% 10-year notes that priced at 99.228 was quoted Thursday at 100.55 bid, 101.05 offered. On Wednesday the notes closed at 100½ bid, 101 offered.

Morocco's 5½% 30-year bonds that priced at 97.464 traded Thursday at 99¼ bid, 103¼ offered.

On Wednesday the notes were spotted at 99 bid, 104 offered.

Quiet session for Ukraine

Bonds from Ukraine have been seeing very little movement this week, said Svitlana Rusakova of Dragon Capital.

Some of the sovereign notes were seen moving about ¼ point lower. The 2017s "got hit on the screen," she said, "while sellers in Ukraine 2021s stepped back."

The 2021s were mostly unchanged.

"In the corporate sector we also saw lower selling pressure in Oschadbank," she said, noting the notes moved down a touch to 94½ bid, 95½ offered. "Meanwhile, [Mironovskiy Hleboproduct SA] and Mriya Agro Holdings remained in demand."

MHP was seen at 104.74 bid, 105¾ offered and Mriya at 100¾ bid, 102¼ offered.

Some market sources were looking ahead to the planned issue of notes from Russia's Gazprom Neft, which is looking to issue up to $2.2 billion of bonds in 2013.

"The company needs funds due to increased capital expenditures," according to a report from UFS Investment Co. "We have a neutral view of the company's eurobond, trading with a discount to the Gazprom yield curve."

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