Sinopec, Noor Bank sell notes; market a ‘mixed bag’; Asian issues tighten; roadshows ahead

By Christine Van Dusen

Atlanta, April 21 – China Petrochemical & Chemical Corp. (Sinopec Group) and Dubai’s Noor Bank PJSC were among the issuers to print notes on a mixed Tuesday for emerging markets assets.

“Overall, the market is a real mixed bag,” a London-based trader said. “It feels like a lot of pass-the-parcel, with the bevy of auctions that run all day every day, and the secondary is proving quite tricky at times. Moderately active day, with balanced flows.”

From Latin America, trading activity was mostly limited to names like Brazil-based Petroleo Brasileiro SA, Mexico’s Cemex SAB de CV and Chile’s Cencosud SA, he said.

Looking to Asia, the tone improved on Tuesday, with high-grade bonds closing unchanged to a couple of basis points tighter, a trader said.

“Quieter, in terms of flow, but new issues continued to squeeze tighter,” he said.

The recent notes due in 2025 that Taiwan’s Formosa Plastics Group priced at a spread of 157 bps over Treasuries traded Tuesday at 159 bps before moving to 161 bps bid, 158 bps offered, he said.

China’s Haitong International Securities Group Ltd.’s 3½% notes due 2020 that priced at 98.8910 to yield Treasuries plus 220 bps traded at 213 bps and closed at 216 bps bid, 213 bps offered.

And South Korea-based Doosan Heavy Industries & Construction Co., Ltd.’s new 2 1/8% notes due that priced at par to yield Treasuries plus 95 bps opened Tuesday at 93 bps bid, 90 bps offered and traded between 94 bps and 92 bps, he said.

In deal-related news, Nigeria’s Africa Finance Corp. set initial talk for a new deal while Oman Electricity Transmission Co. SOAC and China’s Beijing Enterprises Holdings Ltd. planned roadshows.

Asia in focus

Among high-yield names in Asia, property companies from China closed unchanged, a trader said.

“The Kaisa Group complex opened down 3 points to 5 points after it defaulted on its U.S. debt,” he said. “However, the chairman clarified that the (Sunac China Holdings Ltd.) sale plan is unchanged. The curve rallied to close down 1 point to 1½ points on the day.”

Sovereigns see interest

Among Asian sovereigns, Philippines’ long end remained well-bid by local banks, a trader said.

“Seeing more interest in long end Indonesia as well,” he said.

Indonesia’s 2045s were seen trading up at 105 1/8 before closing Tuesday’s Asian session at 105 bid, 105¼ offered.

“India was firm, with buyers in the short end financials,” he said. “Korea was a touch softer, with some sellers in the Korea Export-Import Bank curve.”

Sinopec does deal

In its new deal, China’s Sinopec Group priced a five-tranche issue of dollar-denominated and euro-denominated notes due in five, 10, 30, three and seven years, a market source said.

The $2.5 billion 2½% notes due April 28, 2020 priced at 99.576 to yield Treasuries plus 125 bps after talk in the 145-bps area.

The $1.5 billion 3¼% notes due April 28, 2025 priced at 99.022 to yield Treasuries plus 145 bps after talk in the 160-bps area.

The $800 million 4.1% notes due in 30 years priced at par to yield 4.1%, or Treasuries plus 152 bps, following talk in the 180 bps area.

Sinopec prices euros

Sinopec’s €850 million 0.5% notes due 2018 priced at 99.716 to yield 0.596%, or mid-swaps plus 50 bps, following talk of 50 bps to 55 bps.

The €650 million 1% notes due 2022 priced at 99.243 to yield 1.113%, or mid-swaps plus 80 bps, matching talk.

Citigroup, HSBC, Goldman Sachs, Bank of China and Deutsche Bank were the joint global coordinators for the Rule 144A and Regulation S deal.

The Beijing-based company also mandated Citigroup, HSBC, Goldman Sachs, Bank of China, Deutsche Bank, BofA Merrill Lynch, CCB International, DBS Bank, ICBC International, ING, JPMorgan, Mizuho Securities, Morgan Stanley, Societe Generale CIB and Standard Chartered Bank as joint bookrunners and joint lead managers.

The notes were offered by subsidiary Sinopec Group Overseas Development (2015) Ltd.

Noor Bank sells bonds

Dubai’s Noor Bank priced a $500 million issue of 2.788% notes due May 28, 2020 at par to yield 2.788%, or mid-swaps plus 130 bps, a market source said.

Standard Chartered Bank, Al Hilal Bank, Citigroup, Dubai Islamic Bank, Emirates NBD Capital, Qinvest and Sharjah Islamic Bank were the bookrunners for the Regulation S deal.

“Ticked up and did a lot of work between 100.15 and 100.25 into the close,” a trader said. “Some liquidity around it, but plenty of loose bonds flying around, so let’s see how it opens tomorrow.”

Africa Finance gives guidance

Nigeria’s Africa Finance set initial talk in the Treasuries plus 350 bps area for a five-year issue of dollar-denominated notes, a market source said.

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

The notes could price as soon as Wednesday.

The financial services provider is based in Lagos.

Oman Electricity roadshow

Oman Electricity Transmission will depart for a roadshow on Wednesday to market a dollar-denominated issue of notes, a market source said.

Bank Muscat and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

The notes will be issue by special-purpose vehicle Lamar Funding Ltd.

Beijing Enterprises roadshow

China’s Beijing Enterprises Holdings will set out on Thursday to market a euro-denominated issue of notes, a market source said.

Deutsche Bank UBS, ANZ and DBS Bank are the bookrunners for the Regulation S deal.

The roadshow will be held in Europe.

Southern Copper sells bonds

On Monday, Phoenix-based and Latin America-focused Southern Copper Corp. priced a two-tranche issue of $2 billion notes due April 23 of 2025 and 2045, a market source said.

The $500 million 3 7/8% 10-year notes priced at 99.459 to yield 3.941%, or Treasuries plus 205 bps after talk in the 210 bps area.

The $1.5 billion 5 7/8% 30-year notes priced at 98.833 to yield 5.959%, or Treasuries plus 340 bps after talk in the 345 bps area.

Credit Suisse, Morgan Stanley, BofA Merrill Lynch, HSBC and UBS were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes, including financing of the company’s capital expenditures program.

Southern Copper is a mining, smelting, refining and exploration company with operations in Peru, Mexico, Argentina, Chile and Ecuador.

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