EM investors sell as Gazprom, Petron, MIE, New World China, Huaneng Power print new deals

By Christine Van Dusen

Atlanta, Jan. 30 - Russia's OJSC Gazprom, Philippines-based Petron Corp. and China's MIE Holdings Corp., New World China Land Ltd. and Huaneng Power International Inc. priced deals on a Wednesday of heavy selling for emerging markets assets.

"With the 10-year Treasury closing just north of 2%, I am still seeing better sellers of lower-beta names, but once again it feels a lot worse than it is," a London-based trader said.

While several bonds moved significantly wider during Wednesday's session, some held firm, including Kuwait's Kipco and Bahrain.

"But generally bid/offers have moved out and some bonds are without any love," he said. "Asia this morning only saw sellers, plenty of retail and left-field sellers who have perhaps seen enough so far this year and are piling out."

Dubai's recent 2023 notes printed at 98.25 on Wednesday with a 4.09% yield, as compared to last week's 3 7/8% yield, he said.

The 2043s traded Wednesday at 97.50 after pricing at 98.148.

From Africa, Zambia performed fairly well on Wednesday, closing at 103-mid.

Bonds from Angola moved lower, as did those from Egypt, following the latter sovereign's news of a downgrade from Fitch Ratings.

"Namibia is well placed," a trader said. "However, given the rally on this name on a spread basis versus South Africa, it may be in line for some pressure going forward."

Meanwhile, several issuers took steps toward the market, with deals advanced by Russia's OJSC PhosAgro, Dubai's Emirates Airline, China's Guangzhou R&F Properties Co. Ltd., South Africa's African Bank Ltd. and Kazakhstan.

Asia, Russia active

Looking to Asia and Russia, most names traded actively on Wednesday, the London trader said.

"What a month this has been," he said. "It's had something for everyone, but the good news is, the sting has been taken out of spreads as everyone piled into the market during the first week."

The first week of the month saw a grab-attack, followed by a period of consolidation.

"Now we are in the middle of the heavy move lower," he said. "I'm not entirely sure the selling pressure is over."

Gazprom prices notes

In its new deal, Russian energy company Gazprom - through Gaz Capital SA - priced a two-tranche issue of $1.7 billion notes due 2020 and 2028 at par, a market source said.

The deal included $800 million 3.85% notes due 2020 that priced to yield 3.85% and $900 million 4.95% notes due 2028 that priced to yield 4.95%.

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

Petron sells bonds

Wednesday also saw Philippines-based oil refining and marketing company Petron sell $500 million 7½% perpetual notes at par to yield 7½%.

The notes were talked at a yield of 7 3/8% to 7½%.

Deutsche Bank, HSBC, Standard Chartered Bank and UBS were the bookrunners for the Regulation S deal.

The proceeds will be used to fund capital expenditures.

MIE prints notes

The oil sector was a busy one on Wednesday, with China's MIE Holdings selling $200 million 6 7/8% notes due 2018 at par to yield 6 7/8%, a market source said.

Bank of America Merrill Lynch, Deutsche Bank, HSBC, Goldman Sachs and Morgan Stanley were the bookrunners for the Regulation S deal.

And property company New World sold RMB 3 billion 5½% notes due 2018 at par to yield 5½% via Bank of China International and HSBC in a Regulation S deal.

New issue from Huaneng Power

Also from China, power plant developer and operator Huaneng Power International priced a RMB 1.5 billion issue of 3.85% notes due 2016 at par to yield 3.85%, a market source said.

Bank of America Merrill Lynch, China International Capital Corporation Hong Kong and ICBC were the bookrunners for the Regulation S deal.

In deal-related news, Russia-based fertilizer and phosphates company PhosAgro will set out on Feb. 1 for a roadshow to market up to $500 million of notes.

The roadshow, arranged by Citigroup, Raiffeisen Bank, Sberbank and VTB Capital, will take place in the United States and Europe.

A Rule 144A and Regulation S deal is expected to follow.

Emirates airline sets talk

Dubai's Emirates airline set initial price talk at the mid-swaps plus high-200 basis points to 300 bps area for its dollar-denominated issue of benchmark-sized notes due in February of 2025, a market source said.

Citigroup, Deutsche Bank, Emirates NBD Bank, JPMorgan, Morgan Stanley and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

Guangzhou R&F gives guidance

China-based real estate company Guangzhou R&F Properties set price talk for a tap of its $400 million 8¾% notes due 2020 at the 100.50 area.

Citigroup, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley and UBS are the bookrunners for the Regulation S deal.

The original issue priced earlier this month at par to yield 8¾%, or Treasuries plus 753 bps.

And China State Construction International Holdings Ltd. mandated Bank of America Merrill Lynch, China International Capital Corporation Hong Kong Securities Ltd. and Deutsche Bank for a roadshow, a market source said.

The marketing trip will begin Thursday and travel to Hong Kong, Singapore and London.

Roadshow for African Bank

South Africa's African Bank will set out on Feb. 3 for a roadshow to market a Regulation S issue of dollar-denominated notes with Credit Suisse, Goldman Sachs, Rand Merchant Bank and Standard Chartered Bank.

The roadshow will begin in the United Arab Emirates, then travel to Frankfurt, Geneva, Zurich, Hong Kong, London and Singapore before concluding on Feb. 6.

"Speaking of holding in, African Bank bonds have done just that over the past few months," a trader said.

And Kazakhstan is planning to issue $1 billion of bonds before the second half of 2013, a market source said.

Reliance deal draws orders

The final book for India-based petrochemical and retail conglomerate Reliance Industries' recent $800 million issue of 5 7/8% perpetual notes was $3 billion from more than 160 accounts, according to a company announcement.

The notes priced at par to yield 5 7/8% via Bank of America Merrill Lynch, Citigroup, HSBC, Barclays, Deutsche Bank, JPMorgan and UBS in a Rule 144A and Regulation S deal.

This was Reliance's first dollar bond issuance in the public markets since 1997, the company said.

About 53% of the orders came from Asia, 27% from Europe and 20% from the United States. About 53% went to private banks and 47% to institutional investors.

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