First Gulf, Czech Republic, Turk Eximbank print notes; Dubai, Bahrain, Kipco see demand

By Christine Van Dusen

Atlanta, Oct. 1 - Abu Dhabi's First Gulf Bank PJSC, the Czech Republic and Export Credit Bank of Turkey SA (Turk Eximbank) sold notes on a Monday that saw some buying of emerging markets assets amid healthy but not huge volumes.

"So, all told, a solid start to October," a London-based trader said. "Fairly constructive tone."

Bonds from Dubai were in demand in the secondary market, including Dubai Electricity and Water Authority's 2020s, which traded at the 116.875 to 117.125 level on Monday.

Abu Dhabi's International Petroleum Investment Co. (IPIC) continued to see its curve flatten, the trader said. And Abu Dhabi National Energy Co. (TAQA) began to trade a bit better.

"Bahrain's 2022s are 8 basis points tighter, moving back to 106 on the bid side," he said. "Feel some bids around on the 2020s too."

From Africa, African Export-Import Bank was holding in well in trading on Monday while Angola's notes were mostly unchanged, a trader said.

South Africa-based Investec Ltd. started the day unchanged too, at 98 bid, 99 offered, before trading at 99 1/8 bid, 98 7/8 offered.

In other news from the continent, Morocco plans to issue $700 million to $1 billion of notes in October or November, a market source said.

"Morocco seems to be inching closer to their dollar deal," a trader said.

Market-watchers also were awaiting new dollar notes from Qatar Islamic Bank, which are expected to price this week via Deutsche Bank, HSBC, Standard Chartered and QInvest.

"Anywhere near 2½% five-year and I suspect this goes OK," a trader said. "This one doesn't come every year and is a pure Islamic institution. As we've seen with Doha Bank and Commercial Bank of Qatar, they all get soaked up eventually."

First Gulf prices notes

In its new deal, First Gulf Bank priced a $650 million issue of 2.862% notes due 2017 at par to yield 2.862%, or mid-swaps plus 210 bps, a market source said.

Citigroup, Deutsche Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered were the bookrunners for the Regulation S deal.

"It pretty much prices itself," a trader said, noting that the deal traded well in the gray market. "I still think the market would welcome some supply outside of the financials."

Czech Republic sells bonds

Also on Monday, the Czech Republic priced a €750 million add-on to its 3 7/8% notes due 2022 at 108.333 to yield 2.871%, or mid-swaps plus 116 bps.

The notes priced tighter than talk, set in the area of 120 bps over mid-swaps.

Barclays, Erste Group, Societe Generale and Unicredit were the bookrunners for the Regulation S-only deal.

The original €2 billion issue priced in February at 99.169 to yield 3.977%, or mid-swaps plus 160 bps.

Turk Eximbank does deal

Turk Eximbank's $250 million add-on to its 5 7/8% notes due 2019 came to the market on Monday at 109.875 to yield 4.136% after being talked at a price in the 109.25 area.

Barclays, Citigroup, ING and Standard Chartered were the bookrunners for the Rule 144A and Regulation S deal.

The original $500 million issue priced in April at 98.927 to yield 6.065%, or mid-swaps plus 445 bps.

Trading mixed

In trading on Monday, more buyers were seen for Kuwait's Kipco, with its 2016s and 2020s about 35 bps to 45 bps better on the month.

"Tamweel was a little bit heavy, after a good week last week," he said. "And Qtel International's 2021s and 2025s were well supported again."

And Ukraine's eurobonds have been weakening along with global risk appetite, then recovering in lockstep, according to Svitlana Rusakova of Dragon Capital.

The sovereign's 2020s were quoted near 99 bid, par offered, while its 2021s were seen at 99.5 bid, 100.50 offered.

Russian bonds unchanged

For assets from Russia, the external backdrop on Monday was neutral, according to a report from UFS Investment Co. European indexes were up, S&P futures climbed and oil prices were down about 0.2%.

"Russia 2030 has been unchanged so far," the report said. "We do not [envision] any significant dynamics in Russian eurobonds in the coming days. Further growth will be deterred by moderate negative [news] from the euro area."

Sanluis Rassini sets size

Mexican auto parts company Sanluis Rassini SA de CV set the size at $250 million for an issue of 10-year senior notes via Bank of America Merrill Lynch and JPMorgan, a syndicate source said.

Proceeds will be used to refinance debt and for general corporate purposes.

And Mongolian microfinance company XacBank canceled plans for a dollar-denominated issue of notes via Citigroup and ANZ.

In April, the company ditched plans for a three-year issue of dollar notes with bookrunners ING and UBS.

Kazakh lender oversubscribed

The final book Kazakhstan-based lender Eurasian Development Bank's recent RUB 5 billion issue of 8% notes due 2017 was more than RUB 13 billion, a market source said,

The notes priced at par to yield 8% via RBI and Sberbank in a Regulation S deal.

About 38% of the orders came from Russia, 28% from Asia, 21% from Central Europe, 7% from the United Kingdom and 6% from the United States and others.

Banks picked up 35%, funds 32%, insurers and pensions 26% and retail and others 7%.

Inflows continue

In other news, emerging markets bond funds saw inflows last week of $1.16 billion, according to a report from data-tracker EPFR Global.

"Foreigners' purchases of local equities and bonds in emerging markets were much more mixed in the latest data," said Nick Chamie, head of emerging markets research for RBC Capital Markets. "Only Mexico and India witnessed solid inflows, while the remaining markets posted very small net buying, or outright outflows - including Brazil, Hungary, Turkey, and Indonesia."

The inflows were split five-to-three in favor of hard currency funds, EPFR said.

Last week, emerging markets bond funds saw inflows of $1.25 billion.

"A cooler pace of inflows following the previous week's solid buying is not abnormal," Chamie said. "For the full month, inflows were quite strong."

Aleesia Forni contributed to this article.

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