Indian Overseas Bank lone issuer as EM bonds from Russia, Middle East remain active

By Christine Van Dusen

Atlanta, Aug. 13 - Indian Overseas Bank priced notes on a Monday that featured some light trading action for emerging markets assets, primarily those from the Middle East and Russia, as the summertime slowdown continued.

Indeed, eurobonds from Russia showed moderate growth on Monday morning, according to a report from UFS Investment Co.

The sovereign's 30-year bonds added about 0.1%.

"It should be mentioned that eurobond market hasn't reacted to the statements of the San Francisco Federal Reserve Bank head on Friday," UFS said. "He announced that the Fed should again turn on the printing press due to slow recovery in the labor market. The statement furthered American indices' growth on Friday."

Euro-denominated bonds from Slovakia, Hungary and Czech Republic have been faring well in the secondary market, as have Czech local currency bonds, according to report from Erste Group Research.

Corporate bonds from the region are also holding steady, with most client interest seen on the bid side.

In other trading on Monday, the 2017 notes from Saudi Electricity Co. that traded Thursday at 103 bid, 103.50 offered were seen at 102.75 bid, 103.25 offered.

The company's 2022 notes - which traded Thursday at 109 bid, 109.50 offered - traded Monday at 108.75 bid, 109.50 offered.

And Nigeria's Access Bank plc saw its $350 million issue of 7¼% notes due 2017 - which priced at par - trade Monday at 100.50 bid, 101.25 offered.

The notes were quoted Friday at par bid, 100.75 offered.

Citigroup and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S deal.

Indian Overseas sells notes

In its new deal, Chennai, India-based lender Indian Overseas Bank sold $500 million 4 5/8% notes due Feb. 21, 2018 at 99.42 to yield Treasuries plus 405 basis points, a market source said.

The notes priced tighter than talk, set at Treasuries plus 430 bps.

Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan, RBS and Standard Chartered were the bookrunners for the Regulation S notes.

Qatar bonds garner interest

Also on Monday, the recent $2 billion 2.099% notes due 2018 from Qatar funding vehicle SoQ Sukuk that priced at par were seen at 100.45 bid, 100.70 offered.

On Wednesday, the notes were quoted at 100.50 bid, 100.70 offered.

During the European afternoon, the 2018s were trading at 100.50 bid, 100.65 offered.

The second tranche of that deal - $2 billion 3.241% notes due 2023 that also priced at par - was quoted at 102.55 bid, 102.80 offered on Monday after Wednesday's levels 102.55 bid, 102.85 offered.

Barwa Bank, Deutsche Bank, HSBC, QInvest and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Africa in focus

Tunisia's 2013 notes closed Monday at 101.62 bid, 102.62 offered after closing Friday at 101.75 bid, 102.75 offered. The sovereign's 2020 notes - which ended Friday at 95 bid, 97 offered - were unchanged on Monday.

Egypt's 2020 bonds ended Monday at 97.37 bid, 98.37 offered after Friday's finish of 97.50 bid, 98.50 offered. The sovereign's 2040 bonds closed Monday at 88 bid, 89 offered after closing Friday at 88.25 bid, 89.25.

And Senegal saw its 2021 bonds close on Monday at 113.87 bid, 114.87 offered, from Friday's levels of 113.75 bid, 114.75 offered.

Investec gets some nibbles

From South Africa, financial company Investec Ltd.'s 3 7/8% notes due 2017 saw some nibbling at the high-97 level, a London-based trader said.

The notes priced at 99.775 to yield Treasuries plus 310 bps on July 16 via HSBC, ING, Investec, RBS and Standard Chartered Bank in a Regulation S deal.

"They've still got a way to go to get back to reoffer," he said. "But given where FirstRand's 2016s have traded today and where Saftra's 2016s have traded, I still think with more retail investor take-out and more placing of the loose bonds, this one can move higher. Many bonds that start off their life on the wrong foot can take some time to perform, though."

At midday in Europe, the Investec notes were seen at 97.25 bid, 98.25 offered. The notes closed at 97 bid, 98 offered.

South Africa's five-year credit default swaps, meanwhile, were trading at 128 bid, 133 offered.

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