Khanty-Mansiysk, Altice Finco price notes at end of volatile week; possible deals ahead

By Christine Van Dusen

Atlanta, June 14 - Russia's Bank of Khanty-Mansiysk and Israel-focused Altice Finco SA sold notes on a stronger Friday to end a volatile week for emerging markets assets.

The Markit iTraxx SovX CEEME ex-EU index spread Friday tightened to 207 basis points over Treasuries, narrower than Monday's open of 211 bps.

The boost was provided by a news report that showed there was little risk of short-term rate increases in the United States in the near future. And government officials in Turkey have been taking steps to calm protests.

"A stronger tone in Turkey this morning, with sovereign cash 10 bps to 15 bps tighter and better bidders in corporates," a London-based analyst said.

Still, the Markit iTraxx Crossover index spread ended the week wider. After Monday's level of 436 bps over Treasuries, the spread was spotted Friday at 448 bps over Treasuries.

"US Treasuries are performing this morning," the analyst said. "However, fund flow data released this morning was negative, with $2.5 billion of outflows in EM."

In trading at the end of the week, Qatar's 2042s were seen at 1141/2, tighter by 10 bps.

"Firm start in the Middle East and North Africa, with dealers chasing their tails," she said. "Good interest in perpetuals and subordinated notes."

Emirates NBD's recent perpetual issue of 5¾% notes traded Friday at 92½ bid, 93½ offered. The low print on Thursday was 91 5/8, while the high print on Friday was 93 3/8, a trader said. The notes priced at par.

"Russia is also performing, with the sovereign 2042s 15 bps tighter," the analyst said.

Russian bank sells notes

Bank of Khanty-Mansiysk priced $200 million 9.15% notes due 2023 at par to yield 9.15%, a market source said.

Nomos-Bank and VTB Capital were the bookrunners for the deal.

The issuer is a lender based in Khanty-Mansiysk, Russia.

New issue from Altice

Altice Finco, a Luxembourg-based telecommunications and cable television company that focuses on Israel, sold €250 million 10-year senior notes at par to yield 9%.

The yield printed at the tight end of the 9% to 9¼% yield talk.

Global coordinator Goldman Sachs & Co. will bill and deliver. Morgan Stanley & Co. LLC was also a global coordinator.

Credit Agricole CIB, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. were joint bookrunners.

Proceeds will be used to refinance debt and fund acquisitions.

Turkey in focus

Taking a closer look at the situation in Turkey, sentiment was buoyed on Friday by the prime minister's successful meeting with protestors on Thursday night, the analyst said.

"We feel this is a positive move by the government, which will help calm tensions in Istanbul and is reflective of an increasingly conciliatory tone, which will be key to ending the protests," she said. "However, this should not completely overshadow strong comments from the prime minister yesterday, including giving a final warning to protestors to leave the square within 24 hours."

She is now "more comfortable" with Turkey risk, she said.

VakifBank considers issuance

Also from Turkey, Turkiye Vakiflar Bankasi TAO (VakifBank) is considering the sale of dollar-denominated notes, a market source said.

In April, the Istanbul-based lender priced a $600 million issue of 3¾% five-year notes at 99.432 to yield mid-swaps plus 300 bps.

The notes were talked at a spread in the 305 bps area.

BofA Merrill Lynch, Citigroup, Commerzbank and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

Potential Asian deals

China's HanKore Environment Tech Group Ltd. began a roadshow on Friday for a possible issue of notes, a market source said.

DBS is the bookrunner for the transaction.

HanKore is a water treatment company based in Beijing.

South Korea's Kookmin Bank has mandated BofA Merrill Lynch, Barclays, BNP Paribas, Credit Suisse, HSBC and Mizuho as bookrunners for a roadshow the week of June 17, a market source said.

No other details were immediately available on Friday.

Kookmin is a lender based in Seoul.

China's Poly Real Estate Group Co. Ltd. has mandated Citic Securities International, HSBC, Credit Suisse, Deutsche Bank, ICBC International, RBS and UBS as the bookrunners for an issue of dollar-denominated notes, a market source said.

The Regulation S deal will be marketed during a roadshow in Hong Kong, Singapore and London that begins June 17.

The notes will be issued by Poly Real Estate Finance Ltd, a wholly owned special-purpose vehicle of Hengli (Hong Kong) Real Estate, which is a subsidiary of Poly Real Estate Group.

Eyes on Middle East

Investors were also paying attention to Qtel International on Friday as the company withdrew its offer for Vivendi's Maroc Telecom.

The company's existing 2014 notes were spotted Friday at 104.62 bid, 105.37 offered, while its 2043 notes were seen at 92 bid, 93 offered.

In other news, Moody's Investor Service was reviewing Bahrain's government issuer rating just as the sovereign was undertaking a roadshow for a possible issue of notes.

BNP Paribas, Citigroup, JPMorgan and Gulf Investment Bank are the bookrunners for Bahrain's planned benchmark-sized and dollar-denominated issue of notes.

The roadshow began June 12 and will conclude on June 18.

Bahrain's rating is expected to remain within investment grade, a trader said.

Paul A. Harris contributed to this article.

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