Dubai Islamic issues notes; bombings, upcoming holiday lead to thin trading; Lat-Am mixed

By Christine Van Dusen

Atlanta, March 22 – Dubai Islamic Bank PJSC launched new notes on a Tuesday that saw thin trading as a result of the upcoming holiday and news of terrorist bombings in Brussels.

Also affecting the big picture were oil-related headlines.

“Following the Feb. 16 accord between Qatar, Russia, Saudi Arabia and Venezuela to freeze production levels at January levels, the recent developments now point to an OPEC and non-OPEC meeting on April 17 in Doha,” a London-based strategist said.

About 16 nations are expected to attend, “although it is unclear at this time whether Iran will join,” he said. “Iran has previously announced that it would first intend to raise its production levels to 4 million barrels per day, from 3 million barrels per day while under sanctions.”

But oil prices are expected to make a fairly decent rebound, even without Iran’s participation, he said.

Looking to Latin America, trading was scarce on Tuesday morning, with bonds heading a little bit lower, a New York-based trader said.

Brazil-based Petroleo Brasileiro SA (Petrobras) surprised the market by reporting a fourth-quarter loss, adding to the bleak picture in Brazil, which is struggling with a recession and turmoil in its government.

“[Brazil-based Vale SA] looks a bit softer, in sympathy of Petrobras’ earnings wallop,” he said. “I expect even more selling today in general.”

Vale continued to lose footing throughout the session, while other Latin American names looked poised to close near Monday’s levels, another trader said.

Vale was “is little lower, with much lighter overall volume and inquiry than the past two days,” he said.

Ecopetrol, Cemex see activity

Colombia-based Ecopetrol SA, which opened better-offered, also moved back to Monday’s close, the New York trader said.

“Client inquiry remains better selling, but not markedly,” he said. “[Cemex SAB de CV] is still strong.”

Cemex saw some bids get a nibble, he said.

“Bids remain strong for other bonds out for the bid, like 2021s and 2024s,” he said.

Brazil tightens, Mexico lags

Brazil’s five-year credit default swaps spreads closed Tuesday at 363 basis points from 372 bps, while Mexico’s were unchanged at 158 bps, another trader said.

“Important to note that both Mexico and Peru seemed to lag peers today, with screens well-offered throughout the session,” he said.

High-yield names from the region were mixed on the day, with PDVSA’s 2017s finishing in the 54.25 area and Venezuela’s 2027s down at 42.50 from 43.25.

Argentina’s Bonar 2024s closed at 108.40 from 108.625.

“Volumes did pick up today, with two-way flows and little conviction,” he said. “Continues to feel like a holiday-shortened week, with both volatility and volumes more subdued.”

Dubai Islamic Bank deal

Dubai Islamic Bank launched a $500 million issue of notes due in 2021 at mid-swaps plus 230 bps, a market source said.

The notes were initially talked at a spread in the 245-bps area.

ABC, Dubai Islamic Bank, HSBC, National Bank of Abu Dhabi, Sharjah Islamic Bank and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Roadshow for ICD

Islamic Corp. for the Development of the Private Sector (ICD) will set out on Wednesday for a roadshow to market an issue of dollar-denominated and benchmark-sized Islamic bonds, a market source said.

Bank ABC, Boubyan Bank, CIMB, Dubai Islamic Bank, Emirates NBD Capital, First Gulf Bank, HSBC, Mizuho Securities, Societe Generale CIB and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The issuer – a financial institution that supports member countries through investment in the private sector – is based in Jeddah, Saudi Arabia.

Ghana, Argentina, Boubyan eyed

Also on Tuesday, market sources where whispering about a possible non-deal roadshow for Ghana, following news that the sovereign’s central bank left its benchmark rate unchanged.

Argentina could issue notes, market sources said, with as much as $15 billion coming in early April. And Kuwait’s Boubyan Bank, which in February received regulatory approval to issue $250 million of Islamic bonds, could bring an issue in April as well.

Indonesia attracts orders

The final book for Indonesia’s new two-tranche issue of $2.5 billion Islamic bonds due March 29, 2021 and 2026 was a combined $7.7 billion in orders, a market source said.

The deal included $750 million 3.4% notes due 2021 that priced at par and drew $2.1 billion orders from 120 accounts, with 42% from Islamic countries, 31% from other Asia, 15% from Europe, 10% from Indonesia and 2% from the United States.

The $1.75 billion 4.55% notes due 2026 priced at par and attracted $5.6 billion in orders from 240 accounts, with 28% from Islamic countries, 25% from other Asia, 22% from Europe, 15% from the United States and 10% from Indonesia.

In trading, both tranches were seen at par bid, 100¼ offered, a trader said.

CIMB, Citigroup, Deutsche Bank, Dubai Islamic Bank and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

PT Bahana Securities and PT Danareksa Sekuritas were the co-managers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.