Morning Commentary: HNA, NTPC, Adani see some secondary action; Ukraine, Russia conflict in focus

By Christine Van Dusen

Atlanta, Aug. 16 – Recent bond issues from Asia saw some activity in trading on Tuesday as emerging markets investors continued to watch tensions grow between Ukraine and Russia.

From Ukraine, trading of sovereign bonds has been “rather dull” so far this week, “marked by wide bid-ask levels,” said Svitlana Rusakova of Dragon Capital.

“No new escalation moves from Russia helped support the market mood, yet the domestic e-declarations saga is likely to keep bullishness in check for now,” she said.

She was referring to the Ukraine National Agency for Corruption Prevention’s new program, in which state officials can report their personal incomes via electronic form.

“Banks were slightly lower, with some offers around, while corporates were better bid,” she said.

This came not only as the crisis over Crimea continued between Ukraine and Russia, but also as the latter sovereign released economic data that showed the recovery was slowing down, according to a report from Schildershoven Finance BV.

This “may affect demand for the Russian assets,” the report said. “However, it is a long-term trend, and we do not expect any immediate market reaction.”

Ukraine’s economy, meanwhile, is undergoing a recovery, “good news both for the country and its eurobonds,” Schildershoven said. “However, in our view, the sovereign has to show a longer history of positive figures to attract investors to the local market.”

In trading on Tuesday, the new issue of notes from Hong Kong-based China Aircraft Leasing Group Holdings Ltd. – $300 million 4.9% notes due 2021 that priced Monday at par – were spotted at 100.542 bid, 100.297 ask, a market source said.

China Everbright Bank and DBS Bank were the bookrunners and joint lead managers for the Regulation S deal.

The proceeds will be used for the aircraft leasing company’s new aircraft acquisitions, for financing its aircraft disassembly center, for business expansion and for general corporate purposes.

HNA trades up

China’s HNA Group Co. Ltd. saw its new issue of $300 million 6% notes due Aug. 18, 2019 that priced Monday at par to yield 6% trade at 101.819 bid, 101.495 offered on Tuesday, a market source said.

The issuer is a Haikou City, China-based business conglomerate that focuses on airport services, air transportation, real estate, hotel and catering, travel services, commercial retail, logistics and transportation, financial services and network information technology businesses.

NTPC moves higher

In other trading on Tuesday, India-based NTPC Ltd.'s recent Rs. 20 billion 7 3/8% green bonds due Aug. 10, 2021 that priced at 99.575 to yield 7.48% were seen at 100.25 bid, 100.05 offered, a market source said.

Axis Bank, HSBC, MUFG and Standard Chartered Bank were the bookrunners for the New Delhi power company’s Regulation S deal.

The proceeds will be used to finance investments in renewable energy projects.

Adani climbs

India-based power company Adani Transmission Ltd. saw its recent issue of $500 million 4% 10-year notes that priced at 99.081 to yield 4.33%, or Treasuries plus 260 basis points, make some moves in the secondary market on Tuesday.

The notes were spotted at 102.713 bid, 102.284 offered, a market source said.

The electric power transmission company’s deal priced tighter than talk, set in the 290 bps area over Treasuries.

Barclays, DBS, Standard Chartered, Emirates, NBD Capital, MUFG, Nomura Securities, Societe Generale and SBI Capital were the bookrunners for the deal.

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