Singapore's United Envirotech, Suntec sell notes; Middle Eastern bonds 'port in a storm'

By Christine Van Dusen

Atlanta, Jan. 27 - Singapore's United Envirotech Ltd. and Singapore's Suntec REIT MTN Pte. Ltd. sold bonds on a Monday that saw active trading but lighter volumes for emerging markets assets as investors continued to focus on broader weakness.

"Very tricky market with technical dynamics at play on a bevy of bonds," a London-based trader said. "Spreads have widened, but with the 10-year U.S. Treasury moving to 2.73%, this is understandable."

Front-dated bonds from the Middle East were particularly solid in trading on Monday, he said.

"Generally, in the face of the global backdrop we've witnessed over the past few sessions, the Gulf region has held in very well," the London trader said. "The majority of credits are liquid and are not hostage to the bond market to borrow."

Perpetual notes from the region, however, were a bit "choppier," he said.

"Still seeing the big banks trade well," he said, pointing to National Bank of Abu Dhabi and Qatar National Bank. "The Gulf region is a defensive port in a storm. However, when the likes of Ukraine, Turkey and others rally, we will obviously underperform on the way up, as we have outperformed on the way down."

In other trading from the region on Monday, Emirates Islamic Bank's 2023s, which were squeezed last week, moved back to 101.37 bid, 101¾ offered.

And Dubai Holding's 2017 sterling notes were at 104½ bid, 104¾ offered ahead of the 2014 euro notes' maturity this Thursday.

"Kuwait's Kipco is in London today ahead of a possible trade this week," the London trader said.

Latin America in focus

Looking to Latin America, the market remained weak on Monday, a New York-based trader said.

"Despite the widening, we still haven't seen anything even resembling capitulation yet," he said. "And even though we haven't seen any noteworthy flows of investors stepping in, you have to realize the potential for snap-back, even as headlines continue in negativity."

The morning saw some selling of high-grade names, but activity petered out as the day went on, he said.

"Chilean corporates are holding in OK, all things considered," he said. "And Colombian bank paper feels heavy."

Bank Asya eyed

One trader was keeping an eye on Turkey-based lender Asya Katilim Bankasi AS (Bank Asya), which is considering a $129 million rights issue and a $129 disposal of a stake in a discount retailer.

"It's arguably the most affected Turkish bank from the recent sell off, moving about 100 basis points wider last week, but we have not seen any activity in the bond," she said.

She also noted buying interest for Russian corporates.

"But bonds are generally being marked wider across the curve," she said.

Ghana trades up

In trading of bonds from Africa on Monday, liquidity was a challenge, a trader said.

"Handful of trades, with Ghana 2023s up at 94.50," he said. "Some demand on Morocco."

Gabon's 2024s traded in the low-103s, off a point from recent highs, he said.

The South Africa sovereign curve was slightly wider while Egypt - which so far this year was very solid - was "marked defensively," he said.

"Angola has held in better than most," he said.

Envirotech prices tap

Singapore-based environmental solutions company United Envirotech priced an S$35 million increase of its existing 7¼% notes due 2016 at 100.50 to yield 7.03%, a market source said.

Standard Chartered Bank was the sole bookrunner for the Regulation S deal.

The original issue of S$50 million notes priced on Sept. 3 at par, and an S$50 million increase priced in October at par.

As previously noted, the fixed-rate notes were issued under United Envirotech's $300 million multicurrency medium-term note program established on June 13, 2013.

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

Suntec does deal

In its new deal, Suntec priced S$200 million of six-year notes at par to yield 3.35%, according to an announcement by ARA Trust Management (Suntec) Ltd., manager of Suntec Real Estate Investment Trust.

The issuer is a subsidiary of HSBC Institutional Trust Services (Singapore) Ltd., which is the trustee of Suntec REIT.

The notes will be issued under Suntec REIT MTN's $1.5 billion euro medium-term note program established on Aug. 15.

Australian and New Zealand Banking Group Ltd., DBS Bank Ltd. and Standard Chartered Bank are the joint lead managers and joint bookrunners for the issue.

The proceeds will be used to refinance existing borrowings and for general corporate purposes.

The notes were oversubscribed, drawing orders from 29 accounts, with 95% from Singapore and 5% from others. Fund managers picked up 40%, insurers 31%, banks 18% and private banks 11%.

Puma Energy sets talk

Singapore-based oil and gas company Puma Energy - through Puma International Financing SA - set price talk in the 6¾% area for its upcoming $750 million issue of seven-year notes, a market source said.

Goldman Sachs, Societe Generale, ING, Natixis, RMB and Standard Bank are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds from the notes, which are expected to price on Tuesday, will be used to repay existing indebtedness and for general corporate purposes.

Unicomer postpones

El Salvador's Grupo Unicomer has postponed its planned issue of up to $300 million of notes due in 2021 due to market conditions, a market source said.

The notes, which were to be issued through Regal Forest Holding Co. Ltd., were talked at a spread in the mid-to-high-8% area.

BCP Securities, Citigroup and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

The issuer is an international retailing group.

Mustafa sells notes

On Friday, Singapore's Mohamed Mustafa and Samsuddin Co. Pte. Ltd. sold S$75 million 4¾% notes due 2017 at par to yield 4¾%, a market source said.

The notes were talked at a yield in the high-4% area.

The issuer is a retail company.

Israel deal in demand

Israel's new issue of €1.5 billion 2 7/8% notes due 2024 drew about €5.75 billion in orders, a market source said.

The notes priced at 99.512 to yield 2.932%, or mid-swaps plus 90 bps, via Barclays, Citigroup and Goldman Sachs in a Regulation S deal.

About 21% of the orders came from Germany, 19% from France, 17% from the United Kingdom, 17% from Europe, 7% from the Netherlands, 7% from Switzerland, 5% from Israel, 4% from others and 3% from Asia.

Fund managers accounted for 37%, pension funds and insurers 32%, banks and private banks 22%, central banks and financial institutions 4.5%, hedge funds 3% and others 1.5%.

Marisa Wong contributed to this article.

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