Afreximbank, BOC Aviation sell notes; FOMC remarks make little dent; Turkey outperforms

By Christine Van Dusen

Atlanta, Oct. 29 – Cairo’s African Export-Import Bank (Afreximbank), Singapore’s BOC Aviation Pte. Ltd. and Singapore’s Cambridge Industrial Trust sold notes on Wednesday as the Federal Open Market Committee’s remarks flattened much of the U.S. Treasury curve.

The FOMC on Wednesday ended the quantitative easing program in light of what appear to be improvements in the job market. So market-watchers were wondering when rates would climb.

Despite this uncertainty, the news had only a small impact on Latin American corporate bonds, a New York-based trader said.

Most bonds continued to weaken into the close, he said, though Chile’s corporates “held in pretty well and pulled back a bit,” he said.

Bonds from Mexico-based Cemex SAB de CV also were slightly weaker but still felt firm overall, he said.

Looking to Turkey, the sovereign’s bonds were a “clear outperformer, despite relatively heavy issuance, with investors attracted to the complex given low United States rate expectations, low oil prices and limited opportunities elsewhere in EM,” a London-based analyst said. “We also finally saw some buyers in Russian energy names yesterday.”

In other news from Russia, the European Union elected to keep sanctions in place for the sovereign, a widely-expected move that did not hurt bonds.

“There are concerns, however, that the elections in the rebel-held areas – which are expected to be held on Nov. 2 – could see tensions escalate, as Kiev has refused to recognize the elections,” he said.

In deal-related news, Israel Electric Corp. Ltd. set a roadshow, and Oman’s BankMuscat sought sukuk issuance.

Hungary underperforms

In other trading, bonds from Hungary have been underperforming as a result of protests against a tax on the internet.

“The EU yesterday expressed its concern about the measure,” the analyst said. “There is a high chance of ongoing protests, so we could see further weakness in the country in the short term.”

The sovereign’s 2024s were down Wednesday morning by a half-point to 106½ and the 2041s were down 5/8 point to 128½, a London-based trader said.

“From my understanding, the plan has not been finalized, but the political repercussions may outweigh any fiscal gains,” he said. “It seems the government has backtracked a little; it seems that the tax will only impact corporates and can’t be passed down the consumer. Not sure how that will work.”

And bonds from the Middle East also opened more strongly on Wednesday, the analyst said.

Unacem in focus

Also on Wednesday, the new issue from Peru’s Union Andina de Cementos SAA (Unacem) – $625 million 5 7/8% notes due 2021 that priced at par – opened at about 101.15, a New York-based trader said.

The notes were talked at a yield in the low-6% area and were led by BBVA, Deutsche Bank and Scotiabank in a Rule 144A and Regulation S deal.

Later in the session the notes were seen at 101.60.

The proceeds will be used for financing an acquisition, to refinance existing indebtedness and for general corporate purposes.

“The new Unacem ‘21 saw strong Street volumes as well as consistent customer inquiry on both sides, trading as high as 101.85, opening at 101.15, and closing 101.40 to 101.60,” he said.

New issue from Afreximbank

Afreximbank priced $200 million 4¾% notes due July 29, 2019 at 100.09 to yield 4.727%, a market source said.

HSBC was the bookrunner for the Regulation S notes.

Afreximbank is a Cairo-based international bank specializing in trade related financing for Africa.

BOC Aviation prices notes

BOC Aviation sold RMB 1.5 billion 4.2% notes due Nov. 5, 2018 at par to yield 4.2%, a market source said.

BOC International and HSBC were the bookrunners for the Regulation S deal.

The Singapore-based aircraft leasing company is wholly owned by Bank of China.

Singapore REIT sells bonds

Singapore’s Cambridge Industrial Trust priced S$100 million 3½% notes due Oct. 29, 2018 at par to yield 3½%, a market source said.

RBS was the bookrunner for the Regulation S deal.

The issuer is a Singapore-based real estate investment trust.

Israel Electric sets roadshow

Israel Electric has mandated Barclays and Citigroup to lead a roadshow that will begin on Nov. 3, a market source said.

A dollar-denominated issue of Rule 144A and Regulation S notes is expected to follow.

The issuer is a Haifa, Israel-based public utility.

Issuance ahead for BankMuscat

Oman’s BankMuscat is looking to issue Islamic bonds in early 2015, a market source said.

No other details were immediately available on Wednesday.

The lender is based in Muscat, Oman.

Hutchison Whampoa prices notes

Late on Tuesday, China’s Hutchison Whampoa Ltd. priced a two-tranche issue of $3.5 billion notes due in three and 10 years along with a €1.5 billion issue of euro-denominated notes due in 2021, a market source said.

The deal included $2 billion 1 5/8% notes due in 2017 that priced at Treasuries plus 88 basis points, tighter than talk, set in the 110 bps area.

The $1.5 billion 3 5/8% notes due in 2024 came to the market at 135 bps spread, following talk in the 150 bps area.

As previously reported, the €1.5 billion 1 3/8% notes due Oct. 31, 2021 came to the market at 99.748 to yield mid-swaps plus 68 bps.

Barclays, Credit Agricole, Deutsche Bank, Goldman Sachs and HSBC were the bookrunners for the Rule 144A and Regulation S transaction.

Hutchison Whampoa is a Hong Kong-based business conglomerate.

Global Bank prices bonds

Panama’s Global Bank Corp. priced $400 million 5 1/8% notes due Oct. 30, 2019 at 99.652, a market source said.

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

Other details were not immediately available on Wednesday.

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