New deals from Beijing Capital, Cosco, Banrisul; trading 'decent' despite investor anxiety

By Christine Van Dusen

Atlanta, Nov. 26 - Beijing Capital Land Ltd., India's Icici Bank Ltd., Peru's Corporacion Financiera de Desarrollo SA (Cofide), China Cosco Holdings Co. Ltd., Mexico's Grupo Posadas SAB de CV and Brazil's Banco do Estado do Rio Grande do Sul (Banrisul) sold notes on a post-Thanksgiving Monday that saw some solid trading.

This secondary market activity occurred even as investors worried about Greece and the United States' impending fiscal cliff.

"The Greek headlines continue to dominate," a London-based analyst said. "There seems to be no further progress regarding the fiscal cliff after 10 days of discussion."

Against this backdrop, the Markit iTraxx SovX index spread on Monday opened tighter by 2 basis points while the corporate index was unchanged.

"Despite the market being a mere few days away from December there is some decent interest and activity around on certain names," a London-based trader said.

Some two-way interest was noted for Gulf Investment Co.'s 2017 notes, which held near the issue price of 99.79, a trader said.

"There seems to be enough demand at the yield it offers to hold in fairly well," he said.

He was also keeping an eye on Abu Dhabi National Energy Co., which will soon price a deal.

"Sellers were sighted for Qtel International, especially on the 2025s in the Street," he said. "Buyers for Saudi Electric Co. and two-way action on Dubai."

Some sellers were also seen for Dubai Electricity and Water Authority's 2020s, which closed at 120 on the bid side on Monday.

"Speaking of impressive runs, Abu Dhabi Islamic Bank's perpetuals are closing at 104½ bid, 104 offered, with ongoing regional and retail demand on this one," a trader said. "The success may pave the way for more issuers to look at the performance of this deal perhaps in the new year."

Also on Monday, several issuers prepped new deals, including Chile's Cencosud SA, Belarus, Russia's OAO Rosneft, China Cinda Asset Management Co. Ltd., the Government of Mongolia, El Salvador, Chile's CFR Pharmaceuticals SA and Abu Dhabi's International Petroleum Investment Co. (IPIC).

Beijing Capital prints notes

In its new deal, property owner Beijing Capital Land priced a RMB 2 billion issue of 7.6% notes due Nov. 29, 2015 at par to yield 7.6%, a market source said.

HSBC was the bookrunner for the Regulation S issue.

Proceeds will be earmarked for an escrow account and for working capital and general corporate purposes.

And Icici Bank priced a $250 million increase of its existing 4.7% notes due Feb. 21, 2018 at 102.953 to yield Treasuries plus 340 bps.

Bank of America Merrill Lynch, Citigroup, HSBC, JPMorgan and Standard Chartered were the bookrunners for the Rule 144A and Regulation S deal.

The original issue totaled $750 million and priced at 99.813 to yield 4.739%, or Treasuries plus 400 bps.

Banrisul, Cofide sell bonds

Brazilian lender Banrisul priced a $275 million add-on to its existing 7 3/8% notes due Feb. 2, 2022 to yield 5.95%, a market source said.

The notes were talked at a yield in the 6.1% area.

Bradesco BBI and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

And Peruvian development bank Cofide printed a $100 million add-on to its existing 4¾% notes due Feb. 8, 2022 at 111.25 to yield 3.318%, or Treasuries plus 165.5 bps via Deutsche Bank and JPMorgan in a Rule 144A and Regulation S deal.

The original issue of $400 million of notes priced at 98.437 to yield 4.95%, or Treasuries plus 311.1 bps.

Cosco, Grupo Posadas notes

In another new deal, Beijing-based shipping company Cosco sold $1 billion 4% notes due Dec. 3, 2022 at 98.766 to yield Treasuries plus 250 bps, a market source said.

The notes were talked at a spread of 250 bps to 260 bps over Treasuries.

BOCI and HSBC were the bookrunners for the Regulation S deal.

The proceeds will be used to on-lend to the company's offshore subsidiaries and affiliates for their general corporate purposes.

And Mexican hotel chain Grupo Posadas sold $210 million 7 7/8% notes due in 2017 at 99.493 to yield 8%, in line with talk, set in the 8¼% area.

Bank of America Merrill Lynch, Deutsche Bank, Citigroup and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used to finance the tender of the company's 2015s and for other existing indebtedness.

Demand for Gulf Investment

The final book for Kuwait-based Gulf Investment Corp.'s recent $500 million issue of 3¼% notes due Nov. 28, 2017 was $1 billion from 97 orders, a market source said.

About 57% of the orders came from the Middle East, 38% from Europe and 5% from Asia.

Banks accounted for 50%, private banks 17%, funds 14%, pension and insurance 12% and others 7%.

The notes priced at 99.79 to yield 3.296%, or mid-swaps plus 250 bps, in line with talk.

BNP Paribas, Citigroup, National Bank of Abu Dhabi and Standard Chartered were the bookrunners for the Regulation S deal.

Baidu notes oversubscribed

Also oversubscribed was the $1.5 billion two-tranche issue of senior notes due Nov. 28, 2017 and 2022 from China-based internet search provider Baidu Inc.

The Securities and Exchange Commission-registered deal included $750 million 2¼% notes due 2017 that priced at 99.929 to yield Treasuries plus 160 bps.

The second tranche, $750 million 3½% notes due 2022, priced at 99.849 to yield Treasuries plus 185 bps.

The deal drew about $7 billion in orders, split evenly between the two tranches. The five-year tranche saw 80% of the orders from the United States, 13% from Europe and 7% from Asia.

For the 10-year tranche, 78% of the orders came from the United States, 12% from Europe and 10% from Asia.

JPMorgan and Goldman Sachs were the bookrunners, and ANZ, Bank of China and Deutsche Bank were the co-managers.

Cencosud taps bookrunners

Monday also saw Chilean retail company Cencosud mandate JPMorgan, BBVA, BNP Paribas, Itau BBA, Mitsubishi UFJ Securities, Mizuho Securities and Santander as bookrunners for a roadshow Nov. 26 to Nov. 28, a market source said.

A Rule 144A and Regulation S transaction may follow.

And Belarus has mandated Sberbank and VTB as bookrunners for a roadshow beginning Wednesday, a market source said.

An issue of up to $600 million notes is expected to follow in 2013.

Rosneft mandates leads

Russian oil company Rosneft has mandated Barclays, Citigroup, JPMorgan, VTB, Deutsche Bank, Bank of America Merrill Lynch and Morgan Stanley for its planned issue of eurobonds, a market source said.

A roadshow for the Rule 144A and Regulation S deal began Monday in the United States and Switzerland and will travel to Boston, London and New York before concluding on Nov. 28.

And China Cinda Asset Management is on a roadshow with Bank of China (Hong Kong), BOCI, CCB International, Cinda International, Citic Securities International, Credit Suisse, Morgan Stanley, Standard Chartered Bank, UBS and Wing Lung Bank.

A renminbi-denominated issue of Regulation S notes may follow.

Mongolia picks banks

Mongolia has mandated Bank of America Merrill Lynch, Deutsche Bank, HSBC, JPMorgan and TDB Capital for its planned dollar-denominated issue of notes.

The Rule 144A and Regulation S notes are being marketed on a roadshow that began Nov. 22.

The proceeds will be used for infrastructure and utility projects, according to a report from Standard & Poor's.

And El Salvador is planning to issue up to $800 million of bonds, a market source said.

The proceeds will be used to redeem the sovereign's outstanding $800 million bonds due January 2023.

CFR deal ahead

For another upcoming deal, Chilean pharmaceutical company CFR is on a roadshow for a possible issue of Rule 144A and Regulation S notes, a market source said.

The roadshow began on Nov. 22 in London and traveled to Los Angeles on Monday. The marketing trip ends Tuesday in New York.

Deutsche Bank and JPMorgan are the bookrunners.

And JSC Development Bank of Kazakhstan set price talk at the high-200 bps over mid-swaps area for a planned issue of 10-year notes that will total at least $569 million, a market source said.

JPMorgan, VTB Capital and Halyk Finance are the bookrunners for the Rule 144A and Regulation S deal.

The completion of the deal is subject to the conclusion of a concurrent third-party tender offer for some of the bank's existing notes.

IPIC sets currency, tenor

Abu Dhabi's IPIC will price dollar benchmark notes due in three years, euro benchmark notes due in 5½ years and euro benchmark notes due in 10 years, a market source said.

BNP Paribas, JPMorgan, National Bank of Abu Dhabi, Natixis, RBS and Unicredit are the bookrunners for the Regulation S-only deal.

Pricing is expected to take place on Tuesday.

"Bear in mind this company has some chunky outstanding issue sizes, although granted it is an Aa3-, AA-, AA-rated entity," a London-based trader said.

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