Dubai’s DIFC issues bonds; Croatia yields climb; Serbia prices ‘stable’; roadshows ahead

By Christine Van Dusen

Atlanta, Nov. 4 – Dubai’s DIFC Investments LLC sold notes on Tuesday as Croatia’s bonds received some attention and the new notes from China Oil and Gas Group Ltd. ticked up in trading.

Croatia was on the market’s mind as investors wondered when the sovereign would issue new notes.

“Rumors of an impending new issue drove yields on domestic bonds substantially higher,” according to a report from Erste Group Research.

Market-watchers were also keeping an eye on Serbia, which could issue notes soon and released economic data showing that the economy contracted for a second consecutive quarter.

“Despite negative economic data coming out of Serbia, bond prices remained pretty stable,” the report said.

The sovereign’s existing 2021s were unchanged in trading.

In other trading, China Oil and Gas’ new issue of $300 million 5% notes due 2020 that priced at par traded early Tuesday at 100.10 bid, 100.40 offered, a trader said.

The final book for the Regulation S deal with Deutsche Bank, JPMorgan and Morgan Stanley was $3.4 billion from 246 accounts.

About 81% of the orders came from Asia and 19% from Europe, with 71% from fund managers, 17% from private banks, 6% from insurance, 4% from banks and 2% from agencies and others.

The proceeds will be used to repay certain existing indebtedness and for general corporate purposes.

In deal-related news, guidance was given for deals from SixSigma Networks Mexico SA de CV (KIO) and Poland’s Kompania Weglowa SA. And roadshows were set for China’s Cofco Land Holdings Ltd., Kazakhstan’s KazStroyService Global BV and Banco Santander Chile.

Turkey, Russia in focus

In trading from Turkey, the 6 5/8% notes due in 2045 were seen on Tuesday at 119 bid, 120 offered after previously pricing at 99.026, a London-based trader said.

From Russia, the sovereign’s 3½% notes due 2019 that priced at 99.195 traded Tuesday morning at 97.50 bid, 98 offered.

The 4 7/8% notes due in 2023 that priced at 98.162 were quoted at 98.55 bid, 99.05 offered.

And the 5 7/8% notes due in 2043 that priced at 97.187 were seen at 102¼ bid, 103¼ offered.

And the sovereign’s 3 5/8% notes due 2020 that priced at 99.533 moved to 101.38 bid, 102.38 offered.

DIFC prices notes

In its new deal, Dubai’s DIFC Investments priced $700 million 4 3/8% notes due Nov. 11, 2024 at par to yield 4 3/8%, or mid-swaps plus 185 basis points, a market source said.

The notes were talked at a spread of 185 bps to 190 bps.

Dubai Islamic Bank, Emirates NBD Capital, Noor Bank and Standard Chartered were the bookrunners for the Regulation S sukuk.

DIFC Investments LLC is the investment arm of the Dubai International Financial Centre (DIFC), a state-owned investment agency.

KIO gives guidance

Mexico’s KIO set initial talk in the mid-to-high-8% area for its upcoming issue of $500 million notes due in seven years, a market source said.

Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal. Barclays is a co-manager.

The proceeds will be used to repay indebtedness related to an acquisition and for general corporate purposes.

KIO is a Mexico City-based provider of data center services.

Talk from Weglowa

Poland’s Kompania Weglowa set initial talk in the 9% area for a dollar-denominated issue of benchmark-sized notes due in five years, a market source said.

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

The issuer is a coal mining company based in Katowice, Poland.

Cofco on marketing trip

China’s Cofco Land set out on Tuesday for a roadshow to market a dollar-denominated issue of notes, a market source said.

The issue is expected to be supported by a keepwell deed and a deed of equity interest purchase undertaking to be executed by Cofco (Hong Kong) Ltd., the controlling shareholder of Cofco Land.

The issuer would be Double Rosy Ltd.

Goldman Sachs (Asia) LLC, BOCI Asia Ltd., HSBC Ltd., DBS Bank Ltd., J.P. Morgan Securities plc, ANZ Banking Group Ltd., Bank of Communications Co., Ltd., Hong Kong Branch and Industrial and Commercial Bank of China (Asia) Ltd. are the joint lead managers and bookrunners for the Regulation S deal.

Based in Hong Kong, Cofco is engaged in the development, operation, sale, leasing and management of mixed-use complexes and commercial properties, such as shopping malls, hotels, offices, serviced apartments and resort and tourist properties.

Roadshow for KazStroyService

Kazakhstan’s KazStroyService Global will set out on Wednesday for a roadshow to market a dollar-denominated issue of notes, a market source said.

Deutsche Bank, Halyk Finance and JPMorgan are the joint global coordinators and joint bookrunners and VTB is a joint bookrunner for the Regulation S deal.

The roadshow will be held in Europe and Asia.

The engineering, procurement and construction company is based in Almaty, Kazakhstan.

Santander Chile sets roadshow

Banco Santander Chile has set another roadshow for a possible issue of notes, a market source said.

Deutsche Bank and Santander GBM are arranging the marketing trip, which will begin on Nov. 17 in Frankfurt and Munich and travel to London before concluding on Nov. 21 in Paris.

The Santiago, Chile-based lender previously announced plans for a roadshow starting Tuesday with BofA Merrill Lynch, Deutsche Bank and Santander.

No other details were immediately available on Tuesday.

Mubadala mandates bookrunners

Abu Dhabi’s Mubadala GE Capital Ltd. has mandated Barclays, Citigroup, First Gulf Bank, HSBC and Natixis as bookrunners for a benchmark-sized issue of dollar-denominated notes due in five years, a market source said.

The Rule 144A and Regulation S deal is expected to price this week.

The issuer is a specialized finance company based in Abu Dhabi.

MTN deal attracts orders

The final book for South Africa-based MTN Group Ltd.’s $750 million issue of 4.755% notes due 2024 that priced at par was $3 billion from 165 orders, a market source said.

The notes came to the market at mid-swaps plus 225 bps via Deutsche Bank, BofA Merrill Lynch and Rand Merchant Bank in a Rule 144A and Regulation S deal.

MTN Group is a Johannesburg-based telecommunications company.

Codelco oversubscribed

The final book for copper mining company Corporacion Nacional del Cobre de Chile’s (Codelco) $980 million 4 7/8% notes due Nov. 4, 2044 was $4.6 billion from 235 accounts, a market source said.

The notes priced last week at 98.588 to yield 4.966%, a market source said.

BofA Merrill Lynch, HSBC and Mizuho Financial Group were the bookrunners for Rule 144A and Regulation S deal.

About 60% of the orders came from the United States, 30% from Europe and 10% from others.

Fund managers picked up 72%, banks and private banks 10%, insurance and pension funds 10% and hedge funds 8%.

The proceeds will be used to partially finance the company’s significant capital expenditures during 2015 and for general corporate purposes.

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