Azerbaijani bank, Tencent, Security Bank plan deals; oil prices climb; Ukraine struggles

By Christine Van Dusen

Atlanta, Feb. 2 – International Bank of Azerbaijan set a roadshow while China’s Tencent Holdings Ltd. and the Philippines’ Security Bank Corp. planned new issues on Monday as oil prices rallied and the ceasefire in Ukraine failed, with separatists firing rockets into Eastern Ukraine.

Oil climbed on Monday to about $4 a barrel, a rise of about 11% since Thursday. Russian credit default swaps tightened a few basis points on the news, a London-based analyst said.

Turkish credit default swaps also narrowed, this time by about 2 bps, while sovereign bonds widened about 10 bps.

“In Turkey, the Central Bank continues to face pressure from the government to cut rates further,” he said. “Inflation data on Tuesday could result in an emergency meeting on Wednesday, and an emergency rate cut as a result.”

Additionally, several banks from Turkey released earnings results on Monday, which sent bank bonds wider by as much as 12 bps.

From Asia, economic data for China came in lower than expectations and put pressure on many names while trading was mostly quiet for most high-grade bonds, which closed between 2 bps and 5 bps wider, a London-based trader said.

“The rally in U.S. Treasuries kept real-money accounts sidelined in Asia, but after the London open we had better sellers in the 10-year bucket,” he said.

Oil corporates closed 2 bps to 4 bps wider on Monday while bonds from Korea softened slightly, he said.

Property companies from China closed down by a ¼ point to ¾ point, weighed down by Kaisa Group, which saw its chief executive resign and Sunac China Holdings agreed to purchase some assets.

Kaisa’s bonds closed down as much as 10 points on the news, he said.

Asia in focus

Spreads from India were unchanged, with the short end “a couple basis points tighter,” a trader said.

But poor results from Bank of Baroda hurt others in the space, he said.

And the Indonesia curve was unchanged while Philippines’ bonds were up ¼ point to ½ point, with the 2040s moving as high as 110 7/8 before trading down to 110¼ and later closing at 119 3/8 bid, 110 5/8 offered, he said.

Middle East mixed

Looking to the Middle East and Africa, the new issue of 10-year notes from Tunisia was up about 3 points while Dubai Islamic Bank’s new perpetuals ticked down 5 cents, another London-based trader said.

“Flow-wise, it was only moderately active, with some support for the long end,” he said. “Plenty of retail flow on Lebanon going through, with prices a lot more stable now and spreads still 40 bps to 60 bps wider on the month.”

Bonds from Kuwait were popular on Monday, he said, though Burgan Bank’s perpetuals struggled, he said.

“Bahrain 2044 was popular today on the back of a peer recommendation,” he said. “Yes, curves are steep in [the Gulf region]. The primary reason, as always, is the strong pull from paper out to 10 years from the larger local accounts.”

NBAD plans roadshow

In other news from the region, National Bank of Abu Dhabi announced plans to depart on Tuesday for a roadshow to market a dollar-denominated issue of notes, a market source said.

Citigroup, HSBC and Standard Chartered are leading the marketing trip.

Roadshow for Azerbaijan bank

International Bank of Azerbaijan will set out on Wednesday for a roadshow to market an issue of notes, a market source said.

Other details were not immediately available on Monday morning.

The bank is based in Baku, Azerbaijan.

Tencent plans notes

China’s Tencent Holdings is looking to issue dollar-denominated notes as part of its $5 billion global medium-term note program, according to a company filing.

Deutsche Bank, Barclays and Goldman Sachs are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Tencent is an investment holding company based in Shenzhen, China.

Security Bank eyes more bonds

The Philippines’ Security Bank is looking to issue dollar-denominated bonds, following a recent successful offering, a market source said.

Other details on the new issue were not immediately available on Monday.

On Tuesday of last week the Makati City-based lender priced $300 million of 3.95% notes due 2020 at par via ANZ, Deutsche Bank and UBS.

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