First Pacific, Akbank print notes; corporate spreads widen; Sharjah notes trade down

By Christine Van Dusen

Atlanta, April 10 - China's First Pacific Co. Ltd. and Turkey's Akbank TAS sold notes on a Wednesday that saw wider spreads for emerging markets assets, particularly those in the corporate arena.

The Markit iTraxx SovX CEEME ex-EU index spread on Wednesday widened by 1 basis point to Treasuries plus 193 bps. The corporate index widened more significantly, moving out 22 bps to Treasuries plus 225 bps.

From Latin America, corporate bonds continued to trade well, a New York-based trader said.

"Some high-grade credits that were difficult to buy are becoming somewhat available after their 2- to 3-point run-up," he said. "Overall liquidity has obviously improved."

The new issue of notes from Brazil-based Gerdau SA - a $750 million issue of 4¾% notes due 2023 that priced at 99.020 - saw heavy Street and desk volumes, he said.

"Spread-based credits with duration took a tightening breather yesterday after a strong rip tighter in the prior three days," he said.

And from the Middle East, the Dubai curve was trading "slightly heavily" on Wednesday, a London-based analyst said.

She also noted that the recent $500 million issue of 2.95% Islamic bonds due April 16, 2018 from the United Arab Emirates' Sharjah Islamic Bank was quoted at 99.75, below reoffer.

The new notes, which priced at par, drew $3.2 billion from 150 orders, with 53% of the orders from the Middle East, 30% form Asia and 17% from Europe.

Banks picked up 39%, fund managers 36%, hedge funds and insurance 7%, private banks 4% and others 14%.

Al Hilal Bank, HSBC, Kuwait's Liquidity Management House and Standard Chartered Bank were the bookrunners for the Regulation S deal.

"The existing 2016s have sold off recently, but we expect they will perform in the next couple of weeks," she said.

Turkey expected to perform

One trader on Wednesday was keeping an eye on the recent $1.5 billion 4 7/8% notes due April 16, 2043 that Turkey sold at 98.834 to yield 4.95%.

Citigroup, Credit Suisse and JPMorgan were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general financing purposes, which many include the repayment of debt.

"We expect the new Turkey 2043s to perform and settle 5 bps to 10 bps through the existing curve," the London-based analyst said.

Ukraine notes tick down

The new $1.25 billion issue of 7½% notes due 2023 Ukraine priced at par ticked down in trading on Wednesday, moving to 99.875.

"The announcement of a new sovereign issue sent the long end of the curve about 1 point lower, but it partially recovered," said Svitlana Rusakova of Dragon Capital. "There is good liquidity in the market, which helped the sovereign raise $1.25 billion with a $3 billion book."

Market-watchers now wonder what will come from the International Monetary Fund's mission visit, she said.

"A few longer-dated corporate issuers got hit as well, but the corporate space overall remains stable," she said.

Metalloinvest upgraded

After Moody's Investors Service upgraded Ukraine-based Metalloinvest to Ba2 from Ba3, the company's 2016s moved up to 106.25, the analyst said.

"We maintain our constructive view on the credit, and at a current z-spread of 394 bps, we continue to see value in the Metalloinvest 2016s," she said.

The company is expected to issue new notes in the second quarter of this year.

"We also believe that the new issue could look interesting, depending on pricing and market conditions," she said.

First Pacific, Akbank bonds

In its new deal, China-based telecommunications and food products company First Pacific - through FPC Treasury Ltd. - priced a $400 million issue of 4½% notes due April 16, 2023 at par to yield 4½%, a market source said.

HSBC and Mizuho Securities were the bookrunners for the Regulation S deal.

And Turkey-based lender Akbank priced a $250 million issue of 4 1/8% notes due April 17, 2018 at 99.442 to yield 4¼% after talk at a yield in the 4 3/8% area.

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

Sekerbank sets talk

Also from Turkey, Istanbul-based lender Sekerbank TAS set price talk in the 5¼% area for a dollar-denominated issue of five-year notes, a market source said.

Citigroup, Standard Chartered and Unicredit are the bookrunners for the Rule 144A and Regulation S deal.

In other deal-related news, Philippines-based real estate company Megaworld Corp. set final guidance at 4¼% for its dollar-denominated bond due in 10 years, a market source said.

UBS is the bookrunner for the Regulation S deal.

Nomos Bank picks bookrunners

Russia-based lender OAO Nomos Bank has mandated Citigroup, Gazprombank, JPMorgan, Nomos and VTB Capital as bookrunners for a dollar-denominated issue of notes that will be marketed during a roadshow, a market source said.

The roadshow will begin April 15 and take place in the United States and Europe.

And Kazakhstan-based railway network operator Eastcomtrans LLP has set the tenor at five years for a dollar-denominated issue of notes.

HSBC and BNP Paribas are the bookrunners for the Regulation S deal.

Union Bank of India taps banks

Union Bank of India has mandated BofA Merrill Lynch, Barclays, BNP Paribas, Citigroup, JPMorgan and Standard Chartered Bank for a roadshow beginning April 11.

A dollar-denominated issue of Regulation S notes is expected to follow.

And China-based real estate developer Future Land Development Holdings Ltd. has mandated BofA Merrill Lynch and Deutsche Bank to lead a roadshow beginning Thursday, a market source said.

An issue of notes may follow, subject to market conditions.

KNOC, KCC select leads

Korea National Oil Corp. has tapped BofA Merrill Lynch, Barclays, HSBC and RBS for a roadshow starting April 15, a market source said.

An issue of notes may follow.

And South Korea-based chemical and auto parts manufacturer KCC Corp. has picked Deutsche Bank and JPMorgan for a roadshow starting April 15, a market source said.

The marketing trip will be held in Asia and Europe.

Lindley does deal

On Tuesday, Peru's Corporacion Lindley SA printed a $260 million issue of 4 5/8% notes due April 12, 2023 at par to yield 4 5/8%, or Treasuries plus 288 bps, a market source said.

Citigroup and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Corporacion Lindley is a Coca-Cola and Inka Cola bottler based in Lima, Peru.

CNPC 2016s oversubscribed

The combined final book for China National Petroleum Corp.'s (CNPC) three-tranche issue of $2 billion notes due 2016, 2018 and 2023 was $20.5 billion, a market source said.

The deal included $750 million 1.45% notes due in 2016 that priced at 99.898 to yield 1.45%, or Treasuries plus 115 bps.

The notes drew $5 billion in orders from 223 accounts, with 44% from Asia, 42% from the United States and 14% from Europe.

Asset managers took up 58%, banks 16%, government 12%, insurance 8%, private banks 3% and corporations 3%.

Investors like CNPC's 2018s

The second tranche of notes from China's CNPC - $500 million 1.95% notes due in 2018 that priced at par to yield 1.95%, or Treasuries plus 125 bps - attracted $6.7 billion from 344 accounts, with 53% from Asia, 24% from the United States and 23% from Europe.

Asset managers accounted for 54%, banks 21%, government 15%, insurance 7%, private banks 2% and corporations 1%.

CNPC 2023s attract orders

The $750 million 3.4% notes due 2023 that CNPC priced at 99.966 to yield 3.404%, or Treasuries plus 165 bps, brought in a final book of $750 million.

About 46% of the orders came from Asia, 35% from the United States and 19% from Europe.

Asset managers accounted for 64%, banks 14%, government 11%, insurance 8%, corporations 2% and private banks 1%.

Citigroup, ICBC, Barclays, BOCI, BofA Merrill Lynch, Credit Agricole, Deutsche Bank, HSBC, JPMorgan, Morgan Stanley and Standard Chartered were the bookrunners for the Rule 144A and Regulation S deal.

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