Singapore-based Raffles does local-currency deal; spreads widen; buyers emerge for EM

By Christine Van Dusen

Atlanta, Feb. 19 - Singapore's Raffles Education Corp. Ltd. sold notes on a Tuesday that saw investor demand for emerging markets assets amid wider spreads.

"Better buyers still in the market," a London-based trader said. "Higher-yielders are still doing well and seeing retail demand."

The Markit iTraxx SovX index spread started Tuesday wider at 175 basis points over Treasuries. The corporate index widened too, to a 229 bps spread.

Against this backdrop, Abu Dhabi National Energy Co. (TAQA) pursued plans for a dollar-denominated issue while Dubai Electricity and Water Authority (DEWA) scheduled a roadshow.

Also on Tuesday, three Chinese corporate issuers - CIFI Holdings Group Co. Ltd., Citic Telecom International Holdings Ltd. and Bank of Communications - advanced deals.

In trading, sellers were seen for Dubai's 2043s and buyers for its 2023s.

"The 2023s are holding par very well," the London trader said. "The long one traded at 98.45 this morning with further paper around."

Two-way flows were noted for Jafza Holding's 2019s, and buyers emerged for Bahrain.

"Qtel's 2028s are still doing well, trading at z-spread plus 139 bps on the bid side," he said.

"The Middle East and North Africa market has a good tone this morning, with buyers around and spreads firm and a couple tighter," a London-based analyst said.

In other trading, the recent issue of €500 million 4.032% notes due 2023 that priced at par from Russia-based lender Vnesheconombank saw two-way activity on Tuesday, the London analyst said.

Meanwhile, Russia's benchmark 2030 bonds were "steady, spread-wise," at 124.37 bid, 124 5/8 offered, she said.

"We've seen some early buying on VimpelCom, Halkbank, Gazprombank, Novolipetsk Steel, Dubai and Bahrain," she said. "The market is opening up fairly well supported."

Ukraine in focus

From Ukraine, eurobonds have been mostly unchanged so far this week, said Svitlana Rusakova of Dragon Capital.

The sovereign's 2017 notes "sat comfortably" at 108½ bid, 109½ offered, she said. The 2022s were seen at 101½ bid, 102½ offered.

"Sporadic activity in the corporate sector was driven by some demand in PrivatBank and two-way flows in First Ukrainian International Bank," she said.

Romania notes move up

The secondary market also saw Romania's recent issue of $1.5 billion 4 3/8% notes due 2023 that priced at 98.963 move Tuesday to 99.60 bid, 99.70 offered, a trader said.

The notes came to the market at a yield of 4½%, or Treasuries plus 249 bps.

Barclays, BNP Paribas, Citigroup and HSBC were the bookrunners for the Rule 144A and Regulation S deal.

ADIB closes higher

Another recent issue - Abu Dhabi Islamic Bank's $1 billion 6 3/8% perpetual Islamic bonds - received some attention on Tuesday.

The sukuk priced at par to yield 6 3/8% via Abu Dhabi Islamic Bank, HSBC, Morgan Stanley, National Bank of Abu Dhabi and Standard Chartered Bank in a Regulation S-only deal.

On Tuesday the notes started the session at 104.18 bid, 104.68 offered, then moved to 104.05 bid, 104.45 offered. At the close of the European session, the notes were sighted at 104 1/8 bid, 104 3/8 offered.

TAQA, DEWA on deck

Also from the Middle East, Abu Dhabi's TAQA is planning to issue $800 million in bonds in March, a market source said.

The proceeds will be used to refinance existing debt.

And Dubai's DEWA hold a roadshow in London and Asia during the week of Feb. 25 for about $1 billion of Islamic bonds.

Standard Chartered Bank, Citigroup, RBS, Emirates NBD, Dubai Islamic Bank and Abu Dhabi Islamic Bank are the bookrunners for the Regulation S-only deal.

The proceeds will be used to refinance debt and invest in company projects.

Notes ahead from CIFI

In other deal-related news, China-based property developer CIFI Holdings is planning a dollar-denominated issue of notes in a Regulation S transaction, according to a company filing.

Citigroup, Standard Chartered Bank, Deutsche Bank, HSBC and RBS are the bookrunners for the deal.

The proceeds will be used for refinancing existing indebtedness, the acquisition of new projects or land for development, the development of existing projects and for general corporate purposes.

Citic plans dollar deal

China-based Citic Telecom is looking to issue dollar-denominated notes, according to a company filing.

Deutsche Bank, Standard Chartered Bank and UBS are the bookrunners for the Regulation S deal.

The proceeds will be used to finance acquisitions.

And China's Bank of Communications will set out Wednesday on a roadshow to market a dollar-denominated issue of notes, a market source said.

The notes will be issued by Azure Orbit International Finance Ltd.

The proceeds will be used for general corporate purposes.

Raffles prices notes

In its new deal, Singapore-based private education group Raffles priced S$80 million of 5.8% fixed-rate notes due 2016 at par via HSBC Ltd. and United Overseas Bank Ltd.

The notes will be issued under Raffles' S$300 million medium-term note program established on Feb. 22, 2012.

Proceeds will be used to finance general corporate funding requirements or investments, including refinancing existing borrowings, as well as for working capital expenditures and other general funding requirements.

Settlement is slated for Feb. 22.

African Bank notes get support

Recent local bonds issued by South Africa-based African Bank Ltd. received solid support, according to a company release, even as the company was being investigated for reckless lending.

The bank issued ZAR 800 million of ABLI05 notes due February 2018. The inflation-linked bond, which was initiated as a result of investor interest, bears interest at the South African consumer inflation rate plus 3.2%. Interest is payable annually.

The bank also issued ZAR 250 million of unsecured ABLC08 floating-rate notes due August 2013 with a coupon of three-month Jibar plus 40 bps. The notes were substantially oversubscribed, the bank said in its statement.

African Bank faces a $34 million fine after three agents in one branch manipulated affordability calculations in return for payments.

Toni Weeks and Marisa Wong contributed to this article.

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