KazMunayGas, Mubdala, Saudi Arabia, Damac expect new deals; AFC prices; secondary quiet

By Colin Hanner

Chicago, April 7 – Geopolitical events overnight had secondary bond markets quiet on Friday, gaining if anything, a market source said.

“We’re not seeing that much, a markup in bonds if anything,” a market source said. “People are still digesting what’s going on out there.”

A series of overnight missile strikes in Syria by the U.S. in retaliation for a recent chemical weapons attack dominated headlines late Thursday evening on the East Coast.

And U.S. nonfarm payrolls were well below the 180,000-market expectation, coming in at 98,000. The unemployment rate falling to 4.5%.

“Irrespective of a weaker general market sentiment, the backdrop for EM and CEEMEA credit remained remarkably solid for another week,” a market source said. “While EM spreads were slightly wider over the week ... lower U.S. rates meant that bond prices were up nonetheless.”

Spreads were 5 basis points higher for 10-year dollar-denominated sovereigns and five-year dollar-denominated banks, the source said.

A market source said he expected the secondary market to pick up with rising inflows.

“We’re seeing a massive inflow,” in emerging markets, a market source said. “The money has to go somewhere.”

Pipeline ahead

For the week ahead, a market source said Astana, Kazakhstan-based state-owned oil and gas company KazMunayGas would be finishing up a roadshow for a multi-tranche dollar-denominated deal with a combination of a five-year, 10-year and/or 30-year tenor offer.

Citigroup, Deutsche Bank, UBS Investment Bank, Halyk Finance and SkyBridge Invest were brought on as joint lead managers and joint bookrunners to arrange a series of fixed-income investor meetings that began on Wednesday.

Abu Dhabi’s Mubadala Development Co. PJSC will hold an investor call on Monday, a market source said. The source said the deal is expected to be for dollar-denominated seven-year and 12-year senior unsecured notes.

Saudi Arabia’s inaugural sukuk deal “will be on the road on Sunday,” a market source said, for dollar benchmark five- and 10-year sukuk transactions.

And Damac Real Estate Development Ltd., after holding investor meetings over the past week, is expected to come to the market with a five-year sukuk transaction.

Africa Finance prices

Africa Finance Corp. priced $500 million of 3 7/8% seven-year notes to yield 4% on Thursday, a market source said.

Price talk for the deal had been in the 4 1/8% to 4¼% area, the source said. Another market source said price talk was in the 4 3/8% area.

The deal was oversubscribed at $2.7 billion, a market source said, five times the final amount of the deal.

Citibank, JPMorgan, MUFG and Standard Chartered were the bookrunners on the deal.

4finance announces guidance

Latvia’s 4finance SA announced on Friday that it expects its newly issued five-year notes to yield between 10½% and 11%, the company said.

The terms are subject to change dependent on market conditions and demand.

Stifel Nicolaus is leading the deal, a market source said.

A market source expects a roadshow to begin early next week.

4finance is single and installment loan service company.

Middle Eastern sovereigns

Abu Dhabi’s 6¾% notes due 2019 were quoted 109¾ bid, 110¼ offered, unchanged from Thursday.

And its 2 1/8% notes due 2021 were quoted at 99 bid, 99¾ offered, down ¼ point since Thursday.

Egypt sovereigns

Compared to Thursday, Egypt’s bonds were mixed.

The 5¾% notes due 2020 were quoted with a 104.12 bid, 104.62 offer, about an 1/8 point lower.

Its 6 1/8% notes due 2022 were quoted with a 104¼ bid, 104¾ offer, less than an 1/8 point higher.

And its 5 7/8% notes due 2025 were quoted with a 98.18 bid, 99.19 offer, down less than 1/8 point.

PDVSA, Venezuela bonds

Petroleos de Venezuela SA (PDVSA)’s bonds were higher compared to Thursday’s levels.

Its 5¼% notes due 2017 were quoted with a 98¼ bid, 99¼ offer, a 1¾-point gain.

The 9% notes due 2021 were quoted with a 51¾ bid, 52¾ offer, a 1¼-point gain.

And the 6% notes due 2024 were quoted with a 38½ bid, 39½ offer, a ¼-point higher.

For the week ahead, a market source said to look to PDVSA, especially mid-week.

“In bond markets, the key bonds to watch are in Latin America, with [$2.1 billion] in [PDVSA] bonds maturing on Wednesday,” the source said.

Venezuela’s bonds were mixed on the session.

Its 7% notes due 2018 were quoted with a 69½ bid, 70½ offer, a 2-point gain over Thursday’s levels.

Its 12¾% notes due 2022 were quoted with a 59¼ bid, 60¼ offer, 1¾ points higher.

And its 9¼% notes due 2027 had a 45 bid, 46 offer, down 2¾ points on the day.

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