Singapore corporates issue new notes; Russia dominates headlines; better bids for Dubai, QNB

By Christine Van Dusen

Atlanta, March 11 - Singapore's Amtek Engineering Ltd. and Singapore's United Overseas Bank Ltd. sold notes on a Tuesday that saw emerging markets assets fairly well bid, even as tensions between the United States and Russia ramped up.

"Russia is seeing a slightly better tone this morning, although the feeling is still that any better performance will simply lead to profit-taking," a London-based analyst said. "VTB Bank, Vnesheconombank and Sberbank's seniors have been better across the curve, but the new Sberbank 2024 strongly underperformed yesterday."

On Tuesday, U.S. Secretary of State John Kerry postponed a meeting with Russian President Vladimir Putin after condemning Moscow's activity in Crimea and asking for clearer evidence of engagement in diplomatic proposals.

In response, bonds from Ukraine have so far this week seen "heavy offers," which have "kept up the pressure on the sovereign curve," said Svitlana Rusakova of Dragon Capital. "Corporates were mostly inactive."

Meanwhile, Turkey on Tuesday reported "weak" banking data for January, the analyst said. "But bonds continue to see a decent bid."

Turkish sovereign paper was stable on Tuesday, she said.

Looking to the Middle East, spreads were mixed but the tone was firm, with buyers emerging for Kuwait Projects Co.'s 2019s, a London-based trader said.

"Buyers of Kipco, out of the gates, pushed their 2019s up to the 103½ level, where bonds changed hands," he said. "Kipco's 2016s are still lagging on z-spread, but I suspect the higher dollar-price is affecting performance."

Dubai was better bid, he said.

"Some nibbling on Dubai Islamic Bank near 1001/2, Bahrain 2022s near 108 3/8 and Dubai Electricity and Water Authority's 2016s and 2018s," he said. "Qatar National Bank was better bid today, in line with other financials."

UOB does deal

Singapore-based retail lender United Overseas Bank priced $800 million 3¾% notes due 2024 at 99.357 to yield 3.881%, or Treasuries plus 225 basis points, a market source said.

The notes were talked at a spread in the 230 bps area.

United Overseas Bank, ANZ, Credit Suisse and HSBC were the bookrunners for the Regulation S deal.

Amtek sells notes

In its new deal, Singapore-based manufacturing services provider Amtek Engineering priced S$200 million 6.9% notes due 2019 at par to yield 6.9%, a market source said.

DBS Bank and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The proceeds will be used to finance general corporate purposes, including acquisitions, expansions, general working capital, capital expenditure and investments, as well as to refinance existing borrowings.

Times Property sets talk

China's Times Property Holdings Ltd. set talk in the 13% area for its upcoming issue of five-year notes denominated in dollars, a market source said.

BOC International, Citigroup, Haitong International, HSBC and UBS are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance existing debt, to fund property development projects and for general corporate purposes.

The notes are expected to price this week.

Daycoval gives guidance

Brazil-based lender Banco Daycoval SA set talk in the 6 1/8% area for its upcoming issue of $500 million five-year notes, a market source said.

Bradesco BBI, Itax BBA, J Safra Sarasin and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general corporate purposes.

Azerbaijan attracts orders

About 47% of the orders for Azerbaijan's new $1.25 billion issue of 4¾% notes due 2024 came from the United States, a market source said.

The notes priced Monday at 98.051 to yield 5%, or Treasuries plus 221.8 bps, following talk in the low-to-mid-200 bps area.

About 25% of the orders came from the United Kingdom, 18% from Germany and 10% from others.

Fund managers and corporates picked up 75%, hedge funds 14%, pension funds and insurers 7% and others 4%.

Barclays, Citigroup and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

Petrobras prices bonds

On Monday, Brazil's Petroleo Brasileiro SA (Petrobras) priced a six-tranche, $8.5 billion issue of notes due 2017, 2020, 2024 and 2044 in a Securities and Exchange Commission-registered deal, according to a company filing.

The deal included $1.6 billion 3¼% notes due 2017 that priced at 99.957 to yield Treasuries plus 250 bps. The notes were talked at a spread in the 260 bps area. The bookrunners were Bank of China Hong Kong and HSBC.

The $1.4 billion floating-rate notes due 2017 that priced at par came to the market at a spread of Libor plus 236 bps. The notes were talked at a spread in the 260 bps area. The bookrunners were Bank of China Hong Kong and JPMorgan.

The $1.5 billion 4 7/8% notes due 2020 priced at 99.743 to yield Treasuries plus 330 bps. Talk was set in the 340 bps area. BB Securities and HSBC were the bookrunners.

The $500 million floating-rate notes due 2020 that priced at par carried a spread of Libor plus 288 bps. Talk was set in the 298 bps area. Bradesco BBI and Citigroup were the bookrunners.

The $2.5 billion 6¼% notes due 2024 priced at 99.772 to yield Treasuries plus 350 bps. The notes were talked in the 360 bps area. Bradesco BBI and Citigroup were the bookrunners.

The $1 billion 7¼% notes due 2044 priced at 99.166 to yield Treasuries plus 360 bps. Talk was set in the 370 bps area. Bradesco BBI and Citigroup led the tranche.

The proceeds from the deal will be used for capital expenditures.

The notes were issued by Petrobras Global Finance and guaranteed by Petrobras, an energy company based in Rio de Janeiro.

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