ADB, Emirates, Severstal, Honduras sell notes; spreads 'mixed;' Dubai Islamic Bank on deck

By Christine Van Dusen

Atlanta, March 12 - New issues from Philippines-based Asian Development Bank, Dubai's Emirates airline, Russia's OAO Severstal, Honduras and Singapore's Housing and Development Board hit the market on a Tuesday with mixed spreads and moderate flows.

Also on Tuesday, Dubai Islamic Bank PJSC gave guidance, Turkey's Asya Katilim Bankasi AS (Bank Asya) planned a roadshow, China's Citic Pacific Ltd. tapped bookrunners and China's Kaisa Group Holdings Ltd. and Indonesia's Star Energy Geothermal (Wayang Windu) Ltd. planned deals.

"Spreads are again a mixed bag. But generally they're struggling to match the move back to 2.01% on the 10-year Treasury," a London-based trader said. "Flow-wise, last Tuesday was exceedingly busy, but not so much today."

The Markit iTraxx SovX index spread on Tuesday started the session 1 basis point wider, at Treasuries plus 171 bps. The corporate index moved out 2 bps to 217 bps over Treasuries.

"Mixed market at the moment, with some selling seen," a London-based analyst said.

Two-way activity was noted for Qatar National Bank PJSC's 2018s between 98.60 and 99, a trader said.

"Aldar Properties remains heavy, last printing at 108.60," he said, adding he was "still seeing buyers of Dubai Holding."

In trading among Russian corporates, OAO Sberbank's subordinated notes moved up to 101, a London-based market source said.

"[There is] more buying coming through now on Sberbank seniors," she said, noting "some buying of VimpelCom."

From Africa, notes from Zambia and Ghana moved lower while Gabon and Angola stayed steady, a trader said.

There was "further Street demand for African Bank's 2017s, now offered with a 110 handle," he said. "The South Africa sovereign could not match the move on U.S. Treasuries. And meanwhile, there are still no FirstRand 2016s to be sighted."

And the recent notes from the Republic of Tanzania - $600 million amortizing notes due 2020 that priced at par to yield Libor plus 600 bps - received support on Tuesday, the analyst said.

Standard Bank was the bookrunner for the Regulation S deal.

ADB, Emirates price bonds

In its new deal, Philippines-based lender ADB sold $2.5 billion 0.5% notes due June 20, 2016 at 99.833 to yield mid-swaps minus 4 bps, a market source said.

The notes - via BNP Paribas, Citigroup, HSBC and JPMorgan - were talked at the mid-swaps minus 3 bps area.

And Dubai's Emirates airline - through funding vehicle Medjool Ltd. - printed a $1 billion issue of 3 7/8% amortizing Islamic bonds due in 2023 at 99.331 to yield 4.024%, or mid-swaps plus 300 bps.

The notes were talked at a spread in the low-300 bps area.

Emirates sees buyers

Emirates' new 2016 notes were brought to the market by bookrunners Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Citigroup, Dubai Islamic Bank PJSC, Emirates NBD Capital Ltd. and Standard Chartered Bank in a Regulation S-only sukuk.

Prior to pricing, the notes were trading slightly higher in the gray market, the London analyst said.

Later in the session on Tuesday, the notes moved to 99.23 bid, 99.43 offered.

"We generally saw buyers of their existing 2016s and 2025s," a trader said.

Honduras does deal

In another new deal, Honduras sold $500 million notes due March 15, 2024 at par to yield 7½%, or Treasuries plus 547 bps, with Deutsche Bank.

Barclays stepped away as a bookrunner for the notes following news of a lawsuit against Honduras that wasn't mentioned in the original prospectus for the Rule 144A and Regulation S deal.

Also on Tuesday, Russian steel and mining company Severstal - through funding vehicle Steel Capital SA - sold $600 million 4.45% notes due March 19, 2018 at par.

The notes were talked at a yield in the 4 5/8% area.

Citigroup, JPMorgan and Sberbank CIB were the bookrunners for the Rule 144A and Regulation S deal.

New notes from HDB

Singapore's Housing and Development Board sold S$925 million three-year notes at par to yield 0.943%, a market source said.

BNP Paribas, DBS, Deutsche Bank, HSBC, Standard Chartered Bank and United Overseas Bank were the bookrunners for the deal.

In deal-related news, Turkey's Bank Asya is planning a roadshow for a dollar-denominated issue of Islamic bonds, a market source said.

The roadshow will begin on Thursday.

Dubai bank gives guidance

Dubai Islamic Bank gave initial price guidance in the 7% area for its planned issue of dollar-denominated perpetual Islamic bonds.

Dubai Islamic Bank, Emirates NBD Capital, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank are the bookrunners for the Regulation S sukuk.

"The gray markets didn't flinch," the London trader said. "We have seen some nibbling on the Abu Dhabi Islamic Bank perpetuals this afternoon as people soon realized this DIB could print at 6 3/8% and is up a point in the gray market."

Citic Pacific taps dealers

China-based conglomerate Citic Pacific has mandated HSBC and UBS for a roadshow starting Friday, a market source said.

The roadshow will be held in Asia and Europe.

And China's Kaisa Group is planning a dollar-denominated issue of notes, according to a company filing.

Credit Suisse, JPMorgan, HSBC and ICBC (Asia) are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to finance existing and new property projects and for general corporate purposes.

Star Energy plans notes

Tuesday also saw Star Energy Geothermal (Wayang Windu) planning to issue new notes as part of a tender offer, a market source said.

The company on Monday began a cash tender offer for any and all of its outstanding 11½% senior notes due 2015. As of Feb. 14, the outstanding principal amount of the notes is $337.5 million.

The tender offer and consent solicitation are conditioned on the company receiving sufficient proceeds from the new notes to fund the tender offer, as well as on the execution of a supplemental indenture effecting the proposed amendments.

Barclays and DBS Bank Ltd. are the dealer managers and solicitation agents.

The Indonesian geothermal energy company originally issued $350 million of the 11½% notes.

Wheelock oversubscribed

The final book for China-based financial real estate company Wheelock & Co.'s $500 million issue of 3% notes due March 19, 2018 was more than $3.25 billion from more than 160 accounts, a market source said.

The notes priced at 99.371 to yield 3.137%, or Treasuries plus 225 bps, at the tight end of talk.

DBS, HSBC and Standard Chartered Bank were the bookrunners for the Regulation S deal.

About 97% of the orders came from Asia and 3% from Europe.

Fund managers picked up 55%, banks 26%, private banks 16% and insurers 3%.

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