Primary hosts deals from Burgan Bank, Emaar Properties; oil prices rally; KDB does deal

By Christine Van Dusen

Atlanta, Sept. 7 – Kuwait’s Burgan Bank SAK and Dubai-based property developer Emaar Properties sold notes on a Wednesday that saw oil prices rally for a third session as investors digested Tuesday’s weak non-manufacturing report for August from the United States.

“San Francisco Fed President Williams yesterday reiterated his call for gradual rate increases, preferably sooner rather than later, on the back of the U.S. economy being in a good shape,” a London-based analyst said. “Fed futures are currently pricing in a 24% probability for a rate hike in September.”

Meanwhile, oil prices continued to trade between $45 and $50 per barrel “but have retreated from the highs after a Saudi Arabian-Russian joint agreement to form a working group fell somewhat short of more pronounced expectations,” he said.

By the end of Wednesday’s session, crude was up 67 cents, at $45.50 per barrel.

Saudi Arabia also received attention on the news that the sovereign could cancel $20 billion in transportation, housing and healthcare projects. This comes as the sovereign is preparing a bond deal that could total more than $10 billion, the analyst said.

In other news from the region, Iraq’s 5.8% notes due in 2028 were 50 basis points tighter on the month and were trading Wednesday at 82 bid, 82 5/8 offered, a trader said.

Turkey’s bonds improved on Wednesday, with the curve tightening between 8 bps and 10 bps, a trader said.

“Decent day for risk,” he said. “Long end in demand.”

From Ukraine, bond trading has been mostly strong so far this week, said Svitlana Rusakova of Dragon Capital.

Burgan Bank sells bonds

In its new deal, Kuwait’s Burgan Bank priced $500 million 3 1/8% notes due Sept. 14, 2021 at 99.30 to yield mid-swaps plus 215 bps, a market source said.

The notes were initially talked in the low-to-mid-200 bps area.

HSBC, Standard Chartered, National Bank of Abu Dhabi, Emirates NBD and Societe Generale were the bookrunners for the Regulation S deal.

Burgan Bank is a Sharq-based lender and subsidiary of Kuwait Projects Co. Holding KSC (Kipco).

“Burgan Bank only has one outstanding non-rated perpetual, which has been off-radar for most of the time,” the analyst said. “Moreover, there is a clear lack of Kuwaiti dollar-denominated bonds aside, from the curve by Kuwait Projects.”

Issuance from Emaar

Also on Wednesday, Dubai-based property developer Emaar Properties sold $750 million 3.635% Islamic notes due Sept. 15, 2026 at par to yield 3.635%, or mid-swaps plus 225 bps, a market source said.

The notes were talked at a spread in the 235 bps area.

Standard Chartered, Emirates NBD, National Bank of Abu Dhabi, First Gulf Bank, Dubai Islamic Bank PJSC, Union National Bank, Mashreqbank, Noor Bank and Bank ABC were the bookrunners for the Regulation S deal.

KDB prints two tranches

On Tuesday, Korea Development Bank priced $1 billion in tranches due 2019 and 2026, according to a company filing.

The deal included $500 million 1 3/8% notes due 2019 that priced at 99.830 and $500 million 2% notes due 2026 that priced at 99.120.

BNP Paribas, Goldman Sachs, HSBC, JPMorgan, KDB Asia, Mirae Asset Daewoo, Standard Chartered Bank and UBS were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general operations.

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