Ezra, Olam, China Oilfield, OTP print notes; other issuers 'in the wings'; spreads widen

By Christine Van Dusen and Aleesia Forni

Atlanta, Aug. 30 - Two issuers from Singapore -Ezra Holdings Ltd. and Olam International Ltd. - as well as China Oilfield Services Ltd. and Hungary's OTP Mortgage Bank Ltd. sold notes on Thursday while spreads widened but investors stayed relatively optimistic about emerging markets assets.

The day also saw Turkey's GarantiBank International NV and Russia's JSC Gazprom Neft mandate bookrunners for eurobonds that will be marketed during roadshows next week.

"The first little shoots of the new issue market are appearing, and clearly there must be more waiting in the wings," a trader said.

The Markit iTraxx SovX Index spread was up 7 basis points into the close.

"Wider, yes, but no real panic despite the poor global picture," a trader said.

Most market-watchers were anxiously awaiting Friday's Federal Reserve symposium in Wyoming and wondering whether chairman Ben Bernanke will announce further quantitative easing.

"We expect that most risky assets will moderately decline before [Bernanke's] speech, which will be followed by increased correction," according to a report from UFS Investment Co.

In trading on Thursday, Russia's 2030 bonds were wider by 4 bps at 124 7/8. And two-way activity was reported for Abu Dhabi-based International Petroleum Investment Co. (IPIC)'s 2041 bonds.

"It feels like there are some inflows this week as the textbook names - South Africa and KazMunaiGas, for example - traded well yesterday," a trader said. "So it's going to be an interesting few weeks, with supply, inflows, outflows, Street jockeying and the macro backdrop."

Long-dated notes perform

Other long-dated bonds from the Middle East also fared well on Thursday, catching a bid, with Qatar's 2042 bonds trading at 124.75 bid, 125.75 offered and DP World quoted at 105.25 bid, 106 offered.

"There were some buyers of the long end in Qatar and IPIC," a trader said. "Middle Eastern bank paper is getting harder and harder to replace. It's definitely time for some long issuance from the banks as the demand is impressive."

Bahrain's 2022 bonds were "off to the races" on Thursday, printing at 103, up 3½ points since Wednesday night, he said.

"Bahrain's 6 1/8% 2022s two weeks ago were down at 99.50," he said. "They're now closing at 102.62 bid, 102.87 offered."

Mubadala's 2021 notes were popular, trading with a 114 handle, about 8 bps tighter.

Access Bank trades up

Bond activity from African names was mostly quiet on Thursday, a trader said.

Nigeria-based Access Bank plc opened at 102.62 bid, 103.37 offered then saw some Street nibbling with a 103 handle. The notes priced at par on July 18 via Citigroup and Goldman Sachs.

"It can, arguably, converge closer to [Nigeria-based GTB Finance], which remains solid," he said. "Angola was 106 bid again early in the afternoon before we softened up into the close."

Egypt continued to trade well, "although currency reserves would perhaps suggest some caution is warranted," he said.

Investec widens on week

South Africa-based financial services company Investec Ltd. saw its 2017 notes trading at 97.50 bid, 98.50 offered after pricing July 16 at 99.775.

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

"There's ongoing retail investor inquiry," a trader said. "That's 5 bps wider on the week."

Credit default swaps for South Africa were a bit wider at 149 bid, 153 offered on Thursday.

"Sovereign bonds are obviously wider with the US Treasuries move," he said.

Ukraine gets a lift

Looking to Ukraine, most eurobonds started the session off quietly but got a lift in the afternoon, according to a report from Dragon Capital.

Demand was noted for Ukraine's 2016 and 2017 notes.

"On the long end of the sovereign curve Ukraine's 20s and 21s closed about a point higher at 93.50 bid, 94.50 offered and 94 bid, 95 offered respectively," the report said. "Buyers were also focused on Oschadbank, pushing the bonds as high as 88 bid, 89.5 offered."

Ezra, Olam do deals

In its new deal, Ezra Holdings, which provides offshore support for the oil and gas industry, sold S$200 million 5% notes due Sept. 7, 2015 at par to yield 5%, a market source said.

The notes are part of a recently announced $500 million multicurrency debt issuance program with HSBC and DBS.

Proceeds will be used for refinancing existing debt, capital expenditures and general working capital and corporate purposes.

Food processing company Olam International priced S$250 million 2½% notes due 2013 at par to yield 2½% via DBS and ANZ, a market source said.

China Oilfield prices notes

COSL Finance (BVI) Ltd. - a subsidiary of China Oilfield Services, which engages in the exploration, development and production of oil and natural gas - priced a $1 billion issue of 3¼% notes due 2022 at a spread of 170 bps over Treasuries, according to a syndicate source.

The notes priced at 99.341 to yield 3.328%.

Citigroup, UBS, HSBC, China Merchants Bank, Credit Suisse, DBS, BOCI, Deutsche Bank, Goldman Sachs, JPMorgan and ICBCI were joint bookrunners.

OTP Bank prints bonds

Budapest-based OTP Mortgage Bank, a subsidiary of OTP Bank, priced €510 million floating-rate notes due 2015 at 400 bps over the three-month Euribor, a syndicate source said.

BNP Paribas acted as the bookrunner on the deal.

Roadshows ahead

In deal-related news, Turkish lender GarantiBank mandated Bank of America Merrill Lynch, Citigroup, Commerzbank and Morgan Stanley for an issue of eurobonds that will be marketed during a roadshow, a market source said.

The marketing trip will begin Sept. 3 and travel through Zurich, Geneva, Frankfurt, Munich and New York before wrapping up on Sept. 5.

Gazprom Neft - a Moscow-based oil producer and part of gas company OJSC Gazprom - also tapped bookrunners for an issue of eurobonds and an accompanying roadshow.

Credit Agricole, JPMorgan and Gazprombank will lead the roadshow, beginning Sept. 3.

Market sources were also whispering about possible dollar notes from Uruguay.

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