Dubai eyes $1 billion sukuk in five-, 10-year tranches; Jamaica begins roadshow Wednesday

By Aleesia Forni

Columbus, Ohio, April 24 - Emerging markets saw spurts of trading activity during Tuesday's session, but the market closed "very firm," according to a London-based trader.

In the primary market, Dubai is planning at least $1 billion of sukuk in five- and 10-year tranches, according to market sources.

Initial guidance for the five-year tranche is set at 5%, while the 10-year's guidance is 6½%.

Citigroup, HSBC, National Bank of Abu Dhabi and Dubai Islamic Bank are managing the deal.

The deal's launch is expected within the week, according to a New York-based source, who added that demand for the bonds is strong.

Proceeds will be used to meet budget deficits, the source said.

The Markit iTraxx SovX CEEMEA index, which tracks Central and Eastern Europe, the Middle East and Africa credit default swaps, traded at 296 basis points during the Tuesday London session, 3 bps tighter than Monday's close.

Jamaica roadshow

Jamaica (B3/B-/B-) is also eyeing a transaction and will begin global meetings with fixed-income investors on Wednesday, according to a market source.

Citigroup and BNP are arranging the meetings.

Petroleos de Venezuela bonds

In the secondary market, a trader noted brisk activity with the bonds of Petroleos de Venezuela SA, Venezuela's state oil monopoly.

"That seems to be the one that's finishing up 79-80," the trader said, adding that a "boatload" traded.

According to the trader, the 9% notes due 2021 only started trading Monday at 77 to 771/2. "It definitely has a lot of volume."

The trader noted that the 8½% notes due 2017 were ending around 87½ bid, 88 offered and "looks like it's up a little bit."

While the trader saw Petroleos as "the volume leader - a lot of trading in that whole capital structure," he also said that it was difficult to tell just how much volume there was because the bonds are private.

Russia 30-year bond

The secondary market also saw Russia's bonds due 2042 rally on the day, reaching 105¼ bid near the end of London's session, according to a trader there.

The sovereign's $3 billion 5 5/8% 30-year bonds priced at Treasuries plus 250 bps, or 99.553, to yield 5.798% on March 29.

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