Issuance from Isbank, 21Vianet; spreads tighten but tone is poor; banks line up new deals

By Christine Van Dusen

Atlanta, June 18 – China’s 21Vianet Group Inc. and Turkiye Is Bankasi AS (Isbank) sold notes on Wednesday as spreads tightened on the back of better-than-expected economic data and the resulting move in U.S. Treasuries – in spite of continuing tension in Iraq and Kenya.

“We are still seeing real-money buying in general,” a London-based analyst said.

But overall, the tone was poor for emerging markets bonds, a trader said.

“Only a couple of exceptions, really,” he said.

He pointed to Commercial Bank of Qatar’s 2 7/8% notes due 2019 that priced at 99.497 and National Bank of Ras Al Khaimah’s (RAKbank) 3¼% notes due 2019 that priced at 99.275.

The Qatar bank’s notes closed up at 99.85 on Wednesday, following some solid two-way action, the trader said.

BofA Merrill Lynch, HSBC and Morgan Stanley were the bookrunners for the Regulation S deal.

RAKbank’s notes also saw solid two-way activity and finished Wednesday at 100.15.

National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S deal.

“But for the most part, paper was for sale,” the trader said.

Qtel International’s bonds were between 7 basis points and 12 bps wider, he said, with some of the 2025s trading at 106.45 late in the day.

“The Qatar sovereign was wider,” he said.

Dubai-based Emaar Properties’ 2024 bonds closed near par while Emirates’ 2025 notes held in at 98 bid, 98½ offered.

In deal-related news on Wednesday, Turkey’s Kuveyt Turk Katilim Bankasi AS set talk and Cairo’s African Export-Import Bank (Afreximbank) made plans for a roadshow.

Etisalat euro notes see buyers

Flows were mostly balanced for Abu Dhabi-based Etisalat’s dual-currency $4.3 billion-equivalent offering of euro- and dollar-denominated notes, which included 2 3/8% five-year bonds that priced at 99.691 and $500 million of 3½% bonds that sold at 99.059.

A €1.2 billion tranche of 1¾% notes due 2021 sold at 99.051 to yield 80 bps over mid-swaps. And a €1.2 billion 2¾% bond due 2026 priced at 98.328 to yield 110 bps over mid-swaps.

“Saw buyers of the euro bonds,” a trader said. “Their curve is closing 2 bps to 4 bps wider.”

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

Meanwhile, Abu Dhabi National Energy Co.’s (TAQA) bonds “traded heavy, with what feels like plenty of paper around,” he said. “Definitely one of the weakest days, for some time, in this space.”

Kenya bonds inch up

In other trading on Wednesday, Kenya’s new two-tranche issue of $2 billion notes due in five and 10 years ticked up, a trader said.

The $500 million 5 7/8% notes due 2019 came to the market at par to yield 5 7/8%, following talk in the low-6% area.

The $1.5 billion 6 7/8% notes due 2024 priced at par to yield 6 7/8%, following talk in the low-7% area.

Barclays, JPMorgan, Standard Bank and QNB Capital were the bookrunners for the Rule 144A and Regulation S deal.

“The new Kenya deals performed well early yesterday, but gave up some of the advances, partly due to the Treasury move, trading circa 1½ points above reoffer now,” she said.

21Vianet sells notes

In its new deal, China-based internet data center services provider 21Vianet priced RMB 2 billion 6 7/8% notes due June 26, 2017 via Barclays in a Regulation S deal, according to a company press release.

The proceeds will be used to add new data centers and to fund acquisitions and a tender offer.

No other details on the pricing of the issue were immediately available on Wednesday.

Holders tendered RMB 702,502,000, or 70.3%, of the company’s RMB 1 billion 7 7/8% bonds due 2016 as of 10 p.m. ET on June 16.

As previously announced, the company launched a cash tender offer for its 7 7/8% bonds on June 5.

The offer will expire at 10 p.m. ET on June 23.

Isbank prices bonds

In another new deal, Turkish lender Isbank sold $750 million 5% notes due June 25, 2021 at 98.689 to yield mid-swaps plus 295 bps, a market source said.

The notes priced tighter than talk, initially set in the 320 bps area.

Barclays, Citigroup, HSBC, National Bank of Abu Dhabi and RBS were the bookrunners for the deal.

Talk from Kuveyt Turk

Turkey’s Kuveyt Turk set talk in the mid-swaps plus 375 bps area for its planned issue of dollar-denominated Islamic bonds due in five years, a market source said.

Standard Chartered Bank, Citigroup, Emirates NBD Capital, HSBC and KFH Investment are the bookrunners for the Regulation S deal.

Kuveyt Turk is an Istanbul-based Islamic financial institution.

The company has “strong credit metrics” and the support of principal parent Kuwait Finance House, which has been known to inject capital into the bank, the London-based analyst said.

“The bank is rated BBB by Fitch, in line with Turkiye Finans,” she said. “We therefore see value at the initial price talk of mid-swaps plus 375 bps.”

Afreximbank sets roadshow

Cairo’s Afreximbank will set out on Thursday for a roadshow to market a dollar-denominated issue of notes, a market source said.

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

Ecuador does deal

On Tuesday, Ecuador priced a $2 billion issue of 7.95% notes due June 20, 2024 at par to yield 7.95%, a market source said.

The notes were initially talked at a yield in the low-8% area.

Citigroup is the global coordinator. Citigroup and Credit Suisse were the bookrunners.

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