Issues from GEMS, Ping An, Dalian Wanda, Banco de Chile; Treasuries rally, spreads tighten

By Christine Van Dusen

Atlanta, Nov. 14 - GEMS MEA Sukuk Ltd., Ping An Insurance (Group) Co. of China, Ltd., China's Dalian Wanda Commercial Properties Ltd. and Banco de Chile SA sold notes on a Thursday that saw tighter spreads and buyers for emerging markets debt.

The Markit iTraxx SovX CEEME ex-EU index spread on Thursday opened at 233 basis points over Treasuries, narrower by 5 bps from Wednesday. The corporate index, seen Wednesday at 263 bps over Treasuries, moved in to a 258 bps spread on Thursday.

"[Federal Reserve Vice Chairman Janet] Yellen's dovish testimony yesterday - ahead of her hearing this afternoon - led U.S. Treasuries to rally, with the 10-year opening at 2.72% this morning, from 2.77% yesterday morning," a London-based analyst said Thursday morning. "Central and emerging Europe, the Middle East and Asia are largely playing catch-up this morning, with a generally firm tone."

Buyers were sighted Thursday for Russian banks as well as European sovereigns, she said.

From the Middle East, demand was significant for Saudi Arabia-based Saudi Basic Industries Corp.'s (Sabic) new €750 million 2¾% notes due 2020 that priced at 99.28.

"The new Sabic is trading about ¾ points above re-offer," she said. "We've also seen a small rally in perpetuals in the last few days."

Said a London-based trader, "More good buying of Dubai Islamic Bank and Abu Dhabi Islamic Bank perpetuals from the usual suspects. Plenty were chasing both bonds."

Also on Thursday, Russia's Renaissance Credit Group set talk for a deal, Mexico's Petroleos Mexicanos SAB de CV (Pemex) and Russia's JSC Gazprom Neft planned roadshows, Saudi Electricity Co. (SECO) mandated bookrunners and China XD Plastics Co. Ltd. looked at issuing notes.

Sabic in focus

Taking a closer look at Saudi Arabia's Sabic, the new 2020 notes that priced at par started Thursday's session at 99.80 bid, 100.10 offered before moving to 99.85 bid, 100.15 offered, a trader said.

"With very few loose bonds around on the 2020s, this is dragging the 2018s higher," he said.

The 2018s were spotted on Thursday at 98.87 bid, 99.375 offered.

"Eventful day for Sabic, but the main activity was on the 2018 bond," he said. "Still looks OK. A five-year bond below par, with supply now out of the way for Sabic, is a more natural purchase for locals than the seven-year euro notes."

The 2020 euro notes were "solid" on Thursday and closed near par, about 75 cents up from issue, he said.

"Not many loose bonds around," he said. "Sabic's 2013 euro bond matures in two weeks' time."

Recent issues trade

The new notes from Abu Dhabi Commercial Bank PJSC - $500 million floating-rate notes due 2017 that priced at par - traded on Thursday at par bid, 100 1/8 offered, a trader said.

Deutsche Bank, JPMorgan and Standard Chartered Bank were the bookrunners for the Regulation S deal.

"Abu Dhabi Commercial Bank's floating-rate bond was popular and lifted near 100 1/8," he said. "Closes bid there as the buyer was after plenty."

And the recent issue of 2 1/8% notes that Qatar National Bank SAQ sold at 99.293 was quoted Thursday at 97½ bid, 97¾ offered.

Deutsche Bank, HSBC, Mitsubishi UFJ Securities, QNB Capital and Standard Chartered were the bookrunners for the Regulation S-only deal.

"Looks OK, having pulled back on the news of the ADCB notes," he said. "Should also see more bank [floaters], I'd expect, in the coming months."

Dolphin sees volume

Thursday also saw a fair amount of Abu Dhabi-based Dolphin Energy Ltd. LLC's 5½% 2021 notes go through the market, a trader said.

The notes were trading Thursday in the 109½ to 109¾ context, about 4 bps wider on the week.

"Liquidity remains testing, at best, for the most part," the London-based trader said. "One inquiry alone moved one bond about 75 cents higher today, and tomorrow won't be much better."

Ukraine sentiment falters

From Ukraine, sovereign bonds have moved down slightly so far this week, said Svitlana Rusakova of Dragon Capital.

To blame, she said, are "uncertain prospects for the signing of the European Union and Ukraine association deal," she said. "However, we saw no significant selling in the sovereign, possibly because some people started to wonder if the latest developments made a deal with Russia more likely.

GEMS sells bonds

GEMS priced $200 million 12% perpetual notes at par to yield 12%, a market source said.

The notes were talked at a yield of 11¾% to 12%.

Abu Dhabi Islamic Bank, Credit Suisse and Morgan Stanley were the bookrunners for the Regulation S deal.

The issuer is a subsidiary of Global Education Management Systems Ltd., based in the United Arab Emirates.

Ping An prices notes

Ping An Insurance Group priced a two-tranche issue of RMB 1.8 billion notes due in 2016 and 2018, a market source said.

BofA Merrill Lynch and HSBC were the active bookrunners. Credit Suisse, Ping An Securities, Standard Chartered Bank were the passive bookrunners for the Regulation S deal.

The deal included RMB 1.5 billion 4% notes due 2016 that priced at par to yield 4%. The notes were talked at a yield in the 4.2% area.

The RMB 300 million tap of the company's 4¾% notes due 2018 priced at 101 to yield 4.522% after talk in the 100.75 area.

The original five-year issue totaled RMB 1.8 billion and priced in October at par to yield 4¾% via BofA Merrill Lynch and HSBC in a Regulation S deal.

Dalian Wanda revives deal

In another new deal, China-based real estate and hospitality conglomerate Dalian Wanda Commercial Properties priced $600 million 4 7/8% notes due 2018 at 98.936 to yield 5.119%, or Treasuries plus 375 bps.

The issuer previously postponed a similar deal.

Barclays, BofA Merrill Lynch, Goldman Sachs, HSBC and UBS were the bookrunners for the Regulation S transaction.

Banco de Chile issues

Banco de Chile priced ¥11.1 billion 0.74% notes due 2016 at par to yield 0.74% via Citigroup, a market source said.

Russian airport does deal

On Wednesday, Russia's Moscow Domodedovo Airport priced $300 million 6% notes due 2018 at par to yield 6%, or mid-swaps plus 449.3 bps, a market source said.

ING, Raiffeisen Bank and UBS were the bookrunners for the Regulation S deal.

Russian corporate sets talk

Russia's Renaissance Credit Group set initial talk at 13½% to 14% for its upcoming issue of dollar-denominated notes due in 5½ years, a market source said.

Goldman Sachs and Sberbank are the bookrunners for the Regulation S offering.

Roadshow for Pemex

Mexican petrochemical company Pemex has mandated BBVA, Credit Suisse and HSBC as bookrunners for a euro-denominated deal that will be marketed during a roadshow in Europe, a market source said.

A Rule 144A and Regulation S deal is expected to follow.

Gazprom Neft plans roadshow

Russia's Gazprom Neft has mandated BofA Merrill Lynch, Credit Agricole, Gazprombank and JPMorgan as bookrunners for a dollar-denominated issue of notes that will be marketed during a roadshow, a market source said.

The roadshow will begin on Nov. 18 in London and conclude on Nov. 19 in New York.

A Rule 144A and Regulation S deal is expected to follow.

Gazprom Neft is a Moscow-based oil producer and part of gas company OJSC Gazprom.

SECO picks banks

Saudi Electricity has mandated bookrunners for two issues of Islamic bonds that will be denominated in riyals and dollars, a market source said.

Banque Saudi Fransi and HSBC are the bookrunners for the riyal notes. HSBC, Deutsche Bank and JPMorgan are the bookrunners for the dollar notes.

The deal is expected to price in early 2014.

The utility company is based in Riyadh, Saudi Arabia.

Deal ahead for XD Plastics

China XD Plastics is looking to issue notes in a Rule 144A and Regulation S transaction, according to a company announcement.

The notes will be issued by wholly owned subsidiary Favor Sea Ltd.

No other details were immediately available on Thursday.

The issuer is a Harbin, Heilongjiang-based manufacturer of engineering resins.

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