Ziraat Bank, Aspial do new deals; Turkey, Russia see support; Alpek, Votorantim weaken

By Christine Van Dusen

Atlanta, June 26 – Turkey-based Turkiye Cumhuriyeti Ziraat Bankasy AS’ (Ziraat Bank), Singapore’s Aspial Corp. Ltd. sold notes on a slower Thursday for emerging markets assets as investors paid more attention to the World Cup and developments in Iraq.

Still, bonds from Turkey and Russia got some support in the secondary market, a London-based analyst said.

But “Central and emerging Europe, Romania and Latvia are trading a little heavy,” she said.

Abu Dhabi-based Etisalat’s recent dual-currency $4.3 billion-equivalent offering of euro- and dollar-denominated notes received some attention in trading on Thursday.

The deal included 2 3/8% five-year bonds that priced at 99.691. The notes were seen Thursday at 100.37 bid, 100¾ offered.

The 3½% bonds that sold at 99.059 moved to 100.31 bid, 100.56 offered on Thursday.

A €1.2 billion tranche of 1¾% notes due 2021 that sold at 99.051 was quoted at 99.87 bid, 100.12 offered.

And the €1.2 billion 2¾% bond due 2026 that priced at 98.328 traded Thursday at 99¾ bid, 100½ offered.

Deutsche Bank, Goldman Sachs, HSBC and RBS were the bookrunners.

Looking to Latin America, trading was slow at the open but firm after the previous day’s solid session, a New York-based trader said.

Brazil-based Petroleo Brasileiro SA (Petrobras) saw spreads improve somewhat after taking a beat on the news that the oil and gas company was planning to pay Brazil about $6.8 billion through 2018 to ramp up production in an area that includes the Buzios field.

“The whole curve has tightened back a few basis points, at least,” the trader said.

Lat-Am in focus

Vale SA’s bonds, which widened on Wednesday “in sympathy” with Petrobras, did not recover as well as Petrobras on Thursday, the New York-based trader said.

“Chile corporates are starting to become much more active,” he said.

Real-money investors seemed interested in bonds from Corporacion Nacional del Cobre de Chile (Codelco), he said, after a “long lull,” he said.

But weakness continued for Mexico’s Alpek SAB de CV, Votorantim Group and Odebrecht SA.

Ziraat prices notes

In its new transaction, Turkey-based Ziraat Bank sold $750 million 4¼% notes due July 3, 2019 at 99.595 to yield mid-swaps plus 262.5 bps, a market source said.

The notes were talked at a spread of 287.5 bps to 300 bps.

BofA Merrill Lynch, Citigroup, Deutsche Bank, HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S offering.

Ziraat is an Ankara, Turkey-based lender.

“We expect investors to be attracted to the 100% ownership and generally strong credit metrics,” a trader said.

The price talk was “a little inside” some state-owned bank bonds but wide of private banks, she said.

Aspial prints add-on

Singapore’s Aspial priced an S$45 million add-on to its 5.05% notes due June 12, 2019 at par to yield 5.05%, a market source said.

DBS was the bookrunner for the deal.

The original transaction totaled S$85 million and also priced at par.

The Singapore-based investment holding company manufactures and retails jewelry, engages in property investment, provides building construction and contracting services and offers pawn brokerage services.

Gazprombank launches bonds

Russia’s OJSC Gazprombank launched a €1 billion issue of five-year notes at a yield of 4%, a market source said.

The notes were initially talked at 4 3/8%.

Credit Suisse, Deutsche Bank, GPB Financial Services and Societe Generale are the bookrunners for the deal.

Gazprombank is a Moscow-based lender.

“We think 100 bps over Sberbank would be fair value, given where dollar bonds trade,” a trader said.

Pemex sets talk

Mexico’s Petroleos Mexicanos SAB de CV (Pemex) set talk for an add-on to its 7.19% peso-denominated notes due Sept. 12, 2024 at a spread in the Bonos plus 120 bps area, a market source said.

Banamex, BBVA Bancomer, BofA Merrill Lynch, HSBC and Scotiabank are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

The existing size of the deal is Ps. 26.4 billion.

Pemex is a Mexico City-based petrochemical company.

Berau seeks issuance

Indonesia’s Berau Coal Energy Tbk. PT is looking to issue dollar notes, a market source said.

The proceeds would be used to refinance outstanding notes, totaling $450 million, that are due in 2015.

Other details were not immediately available on Thursday.

The coal producer is based in Jakarta.

Al Hilal oversubscribed

The final book for Abu Dhabi-based Al Hilal Bank’s $500 million 5½% perpetual notes that priced at par was more than $4.5 billion from more than 200 orders, a market source said.

The Islamic bonds were initially talked at a yield in the 6% area.

HSBC, Emirates NBD, Standard Chartered Bank, Citigroup, National Bank of Abu Dhabi and Al Hilal Bank were the bookrunners for the Regulation S offering.

About 40% of the orders came from the Middle East and North Africa, 31% from Asia and 29% from Europe.

Fund managers picked up 32%, private banks 31%, banks 29% and insurers and pension funds 8%.

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