Abu Dhabi's ADIB prices notes amid busy day for Middle Eastern paper; EM under pressure

By Christine Van Dusen

Atlanta, Nov. 22 - Abu Dhabi's ADIB Sukuk Co. Ltd. sold notes on a busy Tuesday for Middle Eastern issuers - including Abu Dhabi National Energy Co. PJSC (TAQA) and Dubai-based developer Majid Al-Futtaim Holding - but a tough session for emerging markets banks.

"An initial attempt to bounce has been met but clients are only looking to sell into the liquidity, so prices are now only a tad firmer. Credit spreads will remain under pressure," a London-based trader said. "The long end of even blue-chip banks like VTB Bank are now at Libor plus 550 basis points. Alfa Bank is now at Libor plus 800 bps."

Only Turkey's banks were holding firm in the morning, he said, while the long end of the sovereign curve took a beating during the session.

Also making news on Tuesday were Russia's corporate issuers, including Gazprombank OJSC, which mandated bookrunners for a dollar-denominated issue of notes.

"It certainly brightens up what is otherwise a rather fraught market," a trader said.

In its new deal, Abu Dhabi's ADIB Sukuk priced a $500 million issue of notes due Nov. 30, 2016 at par to yield 3.78%, or mid-swaps plus 245 bps, a market source said.

The notes priced below talk, set at the mid-swaps plus 250 bps area.

Abu Dhabi Islamic Bank, Citigroup, HSBC, National Bank of Abu Dhabi, Nomura and Standard Chartered Bank were the bookrunners for the Regulation S-registered sukuk issue.

The notes were guaranteed by Abu Dhabi Islamic Bank PJSC, an Islamic financial services group.

"The pricing means it's just holding at reoffer despite being higher in the gray market," a trader said.

TAQA plans roadshow

In other deal-related news from the Middle East, energy holding company TAQA was planning a roadshow with Bank of America Merrill Lynch, Mitsubishi UFJ Securities, Standard Chartered Bank and RBS, a market source said.

The roadshow will take place from Nov. 24 to Nov. 30 in Hong Kong, Singapore, London, New York, Boston and on the West Coast.

The notes are part of a tender offer - with dealer-managers Citigroup and RBS - for $1.5 billion of the company's 5.62% notes due 2012, to be tendered for cash.

The tender offer expires Dec. 5.

In trading, the 2012 notes were trading at 103.25 bid, 103.75 offered early on Tuesday.

"They're bulletproof," a trader said. "TAQA is solid as a rock."

Majid Al-Futtaim sets size

Also from the region, Dubai-based developer Majid Al-Futtaim released details for its planned sukuk issue. The notes are expected to total $350 million to $500 million and be due in five years.

HSBC and Standard Chartered are the bookrunners for the deal.

In trading, Qatar's 2040s were seen 118.50 bid, 119.50 offered.

"The long end just gets marked lower," a trader said. "The 2040s were at 123.50 just one week ago."

Gazprombank taps dealers

Russia-based lender Gazprombank has mandated Credit Agricole, Goldman Sachs, Mitsubishi UFJ Securities and Gazprombank for a dollar-denominated offering of bonds, a market source said.

The notes will be marketed during a roadshow starting Nov. 28 in London.

In trading, Russia's Gazprom opened a touch firmer.

The company's recent deal included $1 billion 4.95% notes due 2016 that priced at par to yield mid-swaps plus 375 bps and $600 million 5.999% notes due 2021 that priced at par to yield mid-swaps plus 390 bps.

The 2016s were seen at 99.50 bid, par offered on Tuesday, and the 2021s were trading at 97.75 bid, 98.25 offered.

"There's very good interest along the Gazprom curve," a trader said. "But with five-year credit default swaps up at 365 bps late on, expect some pressure here."

Indonesia, Baosteel in focus

Also on Tuesday, Indonesia was considering an issue of 10- and 30-year dollar-denominated notes, a market source said.

Issuance is likely at the beginning of 2012.

HSBC, JPMorgan and Standard Chartered are the bookrunners for the deal.

And China-based iron and steel company Baosteel Group Corp. mandated China Merchants Securities, DB Bank, Deutsche Bank, HSBC, ICBC International and Standard Chartered Bank as bookrunners for a renminbi-denominated offering of notes, a market source said.

The Regulation S offering is expected to be launched following a roadshow.

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