Sri Lanka, Australia's Lend Lease print notes; Dubai's Emaar bonds are 'solid as a rock'

By Christine Van Dusen

Atlanta, July 17 - Australia's Lend Lease Finance Ltd. priced Singapore dollar bonds and the Democratic Socialist Republic of Sri Lanka sold dollar notes on a Tuesday that saw good support for emerging markets assets even as the broader markets were choppy.

Particularly good performance was noted from Dubai's 2017 notes, Abu Dhabi-based International Petroleum Investment Co.'s (IPIC) 2041 bonds and Abu Dhabi National Energy Co.'s (TAQA) 2036 bonds and 2021 bonds.

Bonds from South Africa, including the sovereign and Eskom Holdings and FirstRand Bank, were well bid.

"Anything long-end is going full stop," a London-based trader said. "Check out the South Africa 2041s, trading at 135, cash price. This market is exhausting."

There were some laggards with some value, he said. "But they are becoming few and far between."

From the primary market, Lend Lease Finance - part of property and infrastructure company Lend Lease Corp. Ltd. - sold S$275 million 4 5/8% notes due July 24, 2017 at par to yield 4 5/8%, a market source said.

Bank of America Merrill Lynch, Deutsche Bank and Goldman Sachs were the bookrunners for the deal.

Sri Lanka priced a $1 billion 5 7/8% 10-year global senior unsecured bond at par to yield Treasuries plus 437.1 basis points via Bank of America Merrill Lynch, Citigroup, HSBC and Barclays.

A few other issuers took steps toward pricing new deals, including Ukraine, which set price talk for a dollar-denominated issue of benchmark-sized notes. Russian Agricultural Bank was looking at a three-year issue of Swiss franc notes.

"I think September, October and November could be fairly busy for [deals], especially if last year is anything to go by, new issue-wise," a trader said.

Czech Rail does deal

These new deals followed the late-Monday pricing of a €300 million issue of 4 1/8% notes due 2019 by Ceske drahy (Czech Railways).

The notes came to the market at 99.821 to yield 4.155%, or mid-swaps plus 275 bps, much tighter than talk - set at mid-swaps plus 312.5 bps.

Barclays Capital, Citigroup and ING were the bookrunners for the Regulation S deal.

Czech Railways is a railway services company owned by the Czech Republic.

Turkish bank announces bond

In other deal-related news, Turk Ekonomi Bankasi AS announced that its board of directors has approved a €100 million bond due 2042 or similar debt instrument that will bear interest at a rate of 475 bps over six-month Euribor, according to a company release.

The bond becomes callable on July 20, 2019.

As previously announced in October 2011, the Istanbul-based lender's board approved the issuance of up to €800 million of bonds.

Turk Ekonomi privately placed the bonds with European investors.

Ukraine gives guidance

For its planned dollar notes, Ukraine set price talk at 9½% to 9¾%, a market source said.

JPMorgan, Morgan Stanley, VTB Capital and Troika Dialog are the bookrunners for the deal.

Moscow-based Russian Agricultural Bank whispered its three-year issue of up to CHF 150 million notes at mid-swaps plus 293 bps to 305.5 bps.

BNP Paribas and UBS are the bookrunners for the deal, which would follow the lender's recent upsized $350 million tap of its existing notes due 2017.

Those notes came to the market at 100.50 to yield 5.192%.

Investec trades down

In trading on Tuesday, the new issue of $300 million 3 7/8% notes due 2017 from South Africa-based financial company Investec Ltd. - which priced Monday at 99.775 to yield Treasuries plus 310 bps - was seen at 97.25 bid, 98 offered.

HSBC, ING, Investec, RBS and Standard Chartered Bank were the bookrunners for the Regulation S deal.

"Complete shocker of a transaction, and I'm sure I'm not the only person asking a few questions," a trader said. "The bond goes out at 97 bid, 98 offered after having priced at 99.775 last night."

Emaar notes move higher

Dubai-based Emaar Properties' recent $500 million 6.4% notes due 2019, which priced at par to yield mid-swaps plus 519.3 bps, were quoted at 103 bid, 103.62 offered after closing Monday at 102.87 bid, 103.37 offered.

Al Hilal Bank, Barwa Bank, Dubai Islamic Bank, Emirates NBD Capital, HSBC, Noor Islamic Bank and Standard Chartered Bank were the bookrunners for the Regulation S-only deal.

"The recent Emaar 2019s are just solid as a rock, closing out at 103.50 bid, 103.75 offered," a trader said. "Supply and demand at work."

The company's existing 2016 notes were quoted Tuesday at 111.12 bid, 111.87 offered.

Also from Dubai, DPWorld's 2037 notes were trading at 104.50 bid, 105 offered on Tuesday.

"That's a cool 73 bps tighter on the month," he said.

Bahrain notes stay active

The Kingdom of Bahrain's recent $1.5 billion issue of 6 1/8% notes due July 5, 2022 was quoted Tuesday at 100.50 bid, 100.75 offered after trading Monday at 100.37 bid, 100.62 offered.

The notes priced at 99.867 via Citigroup, Gulf International Bank, JPMorgan and Standard Chartered Bank in a Rule 144A and Regulation S deal.

And the $500 million issue of 5¼% seven-year notes from Dubai's Majid al Futtaim that came to the market at par was trading Tuesday at 100.50 bid, 101 offered.

On Monday the notes were seen at 100.30 bid, 100.80 offered.

JPMorgan, National Bank of Abu Dhabi, Barclays Capital, Standard Chartered and UBS were the bookrunners for the Regulation S transaction.

Investors park cash in Qatar

Investors continued to pay attention to the recent two-tranche issue of $4 billion notes due 2018 and 2023 from Qatar.

The 2018 notes opened Tuesday at 100.03 bid, 100.13 bid and later traded at 100.05 bid, 100.15 offered after closing Monday at 100.05 bid, 100.15 offered.

"The 2018s are lower-beta, obviously," a trader said. "Given short-dated rates, I still think it's a good place to park cash."

Qatar's new 2023 notes, which closed Monday at 101.20 bid, 101.40 offered, were seen Tuesday at 101.18 bid, 101.43 before closing at 101.62 bid, 101.87 offered.

"Good volumes," another trader said. "The longer-dated 2023s traded at 102 today before some chips were taken off the table."

The deal - issued by funding vehicle SoQ Sukuk A QSC - included $2 billion 2.099% notes due 2018 and $2 billion 3.241% notes due 2023.

Barwa Bank, Deutsche Bank, HSBC, QInvest and Standard Chartered Bank were the bookrunners for the Regulation S deal.

SECO in focus

In other trading on Tuesday, the 2017 notes from Saudi Electric Co. (SECO) opened Tuesday at 101.62 bid, 102.12 offered after Monday's level of 101.50 bid, 102 offered.

The company's 2022 notes were quoted at 107.62 bid, 108.12 offered on Tuesday. On Monday the notes traded at 107.50 bid, 108.25 offered.

Aleesia Forni contributed to this article.

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