Abu Dhabi Commercial Bank issues notes; Lat-Am tightens; Islamic Development Bank on deck

By Christine Van Dusen

Atlanta, March 3 – Abu Dhabi Commercial Bank PJSC sold notes on Tuesday as Asian bonds remained firm and Latin American corporate bonds ramped tighter amid weaker U.S. Treasuries.

Cash bonds from Asia outperformed credit default swaps spreads, a London-based trader said.

Bonds closed unchanged to 3 basis points tighter as buyers for long-dated paper emerged throughout the day. And the oil complex in China closed 1 bp to 3 bps tighter, with Cnooc Inc.’s 2024s a particular standout, he said.

“Financials were generally unchanged, with decent demand in the five-year paper,” he said. “The tech space is a touch tighter, with good two-way flow in the Tencent Holdings Inc. complex.”

Meanwhile, investor reaction to Indian Overseas Bank’s downgrade by Moody’s to Ba1 was muted, he said.

“Buyers in the financials,” he said.

Among high-yield Asian names, Chinese property companies were mixed, closing up or down about ¼ point, he said.

And the new issue of 7½% notes due 2020 that China’s Country Garden Holdings Co. Ltd. priced at par traded up on Tuesday morning, another trader said.

The notes first moved up to 101, then closed at 101 bid, 101¼ offered, he said.

The proceeds will be used to refinance the company’s $900 million 11 1/8% senior notes due 2018 and for other debt.

From Latin America, high-grade names from Mexico were particularly difficult to source, a New York-based trader.

And bonds from Brazil-based Petroleo Brasileiro SA narrowed again as investors likely made assumptions about upcoming results and write-downs, he said.

“It’s as if the market is now discounting the other ratings agencies, following Moody’s downgrade,” he said. “But it could also be some longs out there who are ramping this thing tighter, to make the plentiful shorts pay. And boy, did they ever.”

Korea, India unchanged

Bonds from Korea closed the day unchanged, with the 2025 notes from Export-Import Bank of Korea (Kexim) trading at new tights, the trader said.

“Some onshore profit-taking,” he said.

India saw its bonds close unchanged, with buyers for corporate names, he said.

High-yield sovereigns were mixed on Tuesday, with the Philippines curve closing ¼ point to ½ point lower in cash but 3 bps to 5 bps tighter in spread, he said.

“Indonesia’s curve closed ¾ point to 1 point lower,” he said. “Indonesia’s 2045 was last down at 106 and closed at 105¾ bid, 106¼ offered.”

Ukraine in focus

Bonds from Ukraine have been slightly better bid this week amid less action, said Fyodor Bagnenko, a fixed-income trader at Dragon Capital.

“There were a lot of flows in the corporates but not much trading as buyers stayed cautious while sellers felt less frightened as the ceasefire in the east was taking hold,” he said.

Ukraine’s MHP SA has seen “bottom fishers,” he said, particularly for the 2015s.

“Last night brought several positive developments, as the [Supreme Council] approved bills required for the IMF program, and will vote on more,” he said. “Also, gas talks in Brussels brought an important agreement that Ukraine is liable to pay [Russia’s OJSC Gazprom] only for the gas delivered to pre-agreed border points.”

ADCB prints bonds

In its new deal, Abu Dhabi Commercial Bank – via ADCB Finance (Cayman) Ltd. – priced $750 million 2 5/8% notes due March 10, 2020 at 99.568 to yield mid-swaps plus 97.5 bps, a syndicate source said.

The notes were talked at a spread in the 105 bps area.

Barclays, ING, JPMorgan, Mizuho Securities and Wells Fargo were the joint lead managers for the Regulation S deal.

Islamic bank sets talk

Islamic Development Bank set talk in the mid-swaps plus 10-bps area for a dollar-denominated and benchmark-sized issue of notes due in 2020, a market source said.

A roadshow for the Islamic bonds is underway and will conclude on Thursday.

CIMB, Dubai Islamic Bank, GIB Capital, HSBC, Natixis Securities, NCB Capital, National Bank of Abu Dhabi, RHB Islamic Bank and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The notes will be issued by IDB Trust Services Ltd., according to a company announcement.

The issuer is a Jeddah, Saudi Arabia-based lender.

Times Property draws orders

In other news, China-based Times Property Holdings Ltd.’s new issue of $280 million 11.45% notes due in 2020 drew more than $1 billion in orders, a market source said.

The notes priced at 99.35 to yield 11 5/8%, following talk in the 11 7/8% area.

Bank of China International, Haitong International and UBS were the bookrunners for the Regulation S deal.

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