Softer day spurred by economic concerns; Lebanon, Saudi British Bank, others sell notes

By Christine Van Dusen

Atlanta, Nov. 9 - New deals came to market at a fairly steady clip on Tuesday while investors engaged in profit-taking stoked by fears about the global economy, concerns about the continuing currency war and questions about the Federal Reserve's plan for quantitative easing.

"The market is softer, and Treasuries are losing ground," an emerging markets strategist said. "I think the market is whipping itself up into a profit-taking phase. But if issuers can come to market, then things can't be that bad."

With little time left before the Veterans Day holiday on Thursday, new notes were sold by Lebanon, Hong Kong's Dah Sing Bank Ltd., Anheuser-Busch InBev Worldwide Inc. and Saudi British Bank.

"Most of the pressure is on the secondary market, rather than the primary market," the strategist said.

Argentina was off 1.4% while the JPMorgan Emerging Markets Bond Index Plus went into late afternoon tighter by 8 basis points.

"It's all the concerns on Ireland and Portugal and the rest," a market source said. "Then there's the currency war and the likely trade restrictions and capital controls, which are investor-unfriendly."

Lebanon, Dah Sing do deals

But the primary market continued to chug along.

The Republic of Lebanon priced a two-tranche issue of notes totaling $725 million due 2018 and 2020, a market source said. The deal included $500 million 5.15% notes due Nov. 12, 2018, which priced at par. The notes were talked to yield between 5.15% and 5.2%.

The second tranche totaled $225 million of 6.1% notes due Oct. 4, 2022, which came to market at par. Price talk was set at 6.1% to 6.15%.

Bank of Beirut and Credit Suisse were the bookrunners for the Regulation S deal.

Proceeds will be used to refinance maturing debt in 2010.

And Hong Kong-based lender Dah Sing Bank priced a $75 million add-on to its existing $175 million Libor plus 135 bps notes due Oct. 7, 2013 at par, a market source said.

HSBC was the bookrunner for the transaction.

Asia gets busier

Also from Asia, China-based property developer Yuzhou Properties Co. Ltd. was on a roadshow in Asia, Europe and the United States for an issue of senior notes via bookrunners Bank of China International, Nomura and RBS, according to a company filing.

Proceeds from the Rule 144A and Regulation S transaction will be used for general corporate purposes, to repay certain existing loans and to fund the acquisition of land for residential and commercial property development.

And plantation forest operator China Forestry Holdings Co. Ltd. set price talk at 7 7/8% for its planned issue of up to $300 million of five-year notes, a market source said.

Deutsche Bank, Standard Chartered and UBS are the bookrunners for the Rule 144A and Regulation S notes, which are non-callable for three years.

Proceeds will be used for forest acquisitions and for general corporate purposes.

Brazilian corporates on tap

From Latin America, Peru-based lender BBVA Banco Continental SA is planning a dollar-denominated issue of benchmark-sized notes due 2020, a market source said.

Credit Suisse, Deutsche Bank and BBVA are the bookrunners for the Rule 144A and Regulation S deal. Proceeds will be used for general corporate purposes.

Brazil-based lender Banco Votorantim set price talk for its planned CHF 250 million issue of notes due Dec. 2, 2013 at a yield of 2¾%, a market source said.

Deutsche Bank, BB Securities and Banco Votorantim are the bookrunners for the deal.

In a real-denominated deal, beverage company Anheuser-Busch InBev Worldwide priced R$750 million senior notes due Nov. 17, 2015 at par to yield 9¾%, a market source said.

Barclays Capital, Deutsche Bank and Itau were the bookrunners for the Securities and Exchange Commission-registered notes, which are payable in dollars.

The deal was talked at a yield in the 9 7/8% area.

And Brazil's Odebrecht Drilling Norbe XII/IX Ltd. set price talk for its $1.5 billion 10-year final, 8.1-year average life bonds at a yield in the 6½% area, a market source said.

Santander, HSBC, Deutsche Bank and BB Securities are the bookrunners for the Rule 144A and Regulation S deal.

Proceeds will be used to refinance existing debt related to the construction and operation of two deepwater drill ships.

Peru on tap

But the Latin American deal of most interest on Tuesday was Peru's planned dollar benchmark notes due 2050 and expected reopening of the PEN 7.84% benchmark notes due August 2020.

The notes, via Bank of America Merrill Lynch and Morgan Stanley in an SEC-registered deal, are expected to price on Wednesday.

Proceeds will be used to reimburse Peru's Public Treasury about $63 million in connection with the financing and tender offer of global bonds from April, and to pre-finance a portion of the general financial requirements for the year 2011.

"It's interesting that they would look to come when you had a Treasury auction that didn't turn out to be too optimistic," said Enrique Alvarez, debt strategist with think tank IDEAglobal.

"As you look at the long end of the Treasury curve, you had a sell-off in 10- and 30-year paper," he said. "It seems to be keeping some pressure on EM in general and Latin America in particular. So Peru is the big news of the day."

Middle East heats up

The Middle East was also busy on Tuesday, with Saudi British Bank pricing $600 million 3% senior notes due Nov. 12, 2015 at 99.32 to yield 3.148%, or mid-swaps plus 170 bps, via HSBC in a Regulation S deal.

Also from the region, Qatar National Bank set price talk for its planned benchmark-sized issue of dollar-denominated notes due 2015 at mid-swaps plus 200 bps, a market source said.

Barclays Capital, BNP Paribas, JPMorgan, QNB Capital and Standard Chartered are the bookrunners for the Regulation S-only deal.

Additionally, Abu Dhabi's First Gulf Bank set price talk for its planned dollar notes due 2015 at mid-swaps plus 250 bps, a market source said.

BNP Paribas, Citigroup, Deutsche Bank, HSBC and National Bank of Abu Dhabi are the bookrunners for the Rule 144A and Regulation S notes.

And Abu Dhabi's International Petroleum Investment Co. set price talk for a two-tranche issue of bonds due 2015 and 2020, a market source said.

The five-year notes, totaling up to $1.5 billion, are being talked at a spread in the Treasuries plus 200 bps area. The 10-year notes, totaling about $1 billion, are being talked at a spread in the Treasuries plus 250 bps area.

Goldman Sachs, Bank of America Merrill Lynch, HSBC, National Bank of Abu Dhabi, Standard Chartered and RBS are the bookrunners for the Rule 144A and Regulation S deal.

VEB talks notes

Tuesday also saw Russia-based lender Vnesheconombank set price talk for a two-tranche issue of benchmark-sized dollar-denominated notes due 2017 and 2025, a market source said.

The seven-year notes are being talked to yield 5 1/8% to 5½%. The 15-year notes are being talked at a yield in the 6.8% area.

Citigroup, Credit Agricole, HSBC and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal, which includes a change-of-control put at par.

And market-watchers say Senegal could be contemplating a sukuk offering of notes for 2011.

In other news, the $320 million 11¼% notes due 2015 from Oman's MB Petroleum Services - which priced Monday at par - were oversubscribed by 1.5 times with 100 orders, a market source said.

About 45% came from the United Kingdom, 24% from the United States, 11% from the Middle East, 8% from Switzerland, 7% from Asia and 5% from Europe.

Funds accounted for 70%, private banks 16% and banks 14%.

The final book for the $1 billion 5¾% notes due 2020 from India's Icici Bank Ltd. - which priced this week at 99.542 to yield 5.811% - drew $5 billion orders from 325 accounts. About 42% came from Asia, 42% from the United States and 16% from Europe.

Funds accounted for 59%, insurers 14%, banks 12%, retail 11% and central banks 4%.

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