Senegal, Cyfrowy Polsat, Chian Liansu, others sell notes; Greece dampens market sentiment

By Christine Van Dusen

Atlanta, May 6 - Though a better-than-expected payroll report from the United States helped to boost sentiment, the lift was temporary, as emerging markets bond investors went back to worrying about Greece and the fate of the global economy.

Still, attraction to emerging markets assets remains relatively healthy, and several issuers printed notes on Friday to meet the demand, including Senegal, Poland's Cyfrowy Polsat Finance AB, China's Chian Liansu Group Holdings Ltd., Thailand's Siam Commercial Bank PCL, China's ENN Energy Holdings Ltd. and Kansas City Southern de Mexico SA de CV.

"It still feels like there's a decent amount of cash around, and locals remain on the bid, looking for paper," the trader said. "It's the end of a solid week in the face of some big moves in the broader markets."

But trading was thin as a result of rumors that debt-saddled Greece could leave the euro zone. Officials from the sovereign denied this, but the damage was done - spreads widened, with the JPMorgan Emerging Markets Bond Index Plus spread up 8 basis points over the week.

"Flows were light today," a London-based trader said.

Senegal sells notes

In its new deal, Senegal sold $500 million 8¾% senior notes due May 13, 2021 at 97.574 to yield 9 1/8%, or Treasuries plus 596.4 bps, a market source said.

The notes priced in line with talk, which was set at the low- to mid-9% area.

Standard Bank and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

"That gapped up 4 points in the gray," a market source said. "You have to stand and marvel, especially against the backdrop of other new EM issues tanking a point."

Polsat prices bonds

Also on Friday, Poland-based pay-television company Cyfrowy Polsat priced €350 million notes due May 20, 2018 at par to yield 7 1/8%, or Bunds plus 422 bps, a market source said.

Credit Agricole, Citigroup and RBS were the bookrunners for the Rule 144A and Regulation S notes, which include a change-of-control put at 101% and an equity clawback of up to 35% at 107.125 until May 20, 2014.

The notes also include a make-whole call at Bunds plus 50 bps until May 20, 2014, then on May 20 in 2014 at 105.344; in 2015 at 103.563, in 2016 at 101.781 and in 2017 and thereafter at par.

Proceeds will be used to refinance debt.

"It has traded up 1½ points since launch," a market source said.

Chian Liansu does deal

Friday also saw China-based pipe and pipefittings manufacturer Chian Liansu Group Holdings sell $300 million 7 7/8% notes due May 13, 2016 at 99.493 to yield 8%, a market source said.

JPMorgan and RBS were the bookrunners for the Rule 144A and Regulation S notes.

Proceeds will be used for general corporate purposes, capital expenditures and refinancing debt.

And Thailand-based Siam Commercial Bank sold $400 million 3.9% notes due Nov. 14, 2016 at 99.769 to yield Treasuries plus 205 bps, a market source said.

Barclays Capital and Deutsche Bank were the bookrunners for the Regulation S notes.

ENN Energy prints bonds

In another new deal from China, gas investor and distributor ENN Energy Holdings sold $750 million 6% notes due May 13, 2021 at 99.274 to yield 6.098%, or Treasuries plus 295 bps, a market source said.

The notes - which include a make-whole call at Treasuries plus 25 bps - priced in line with guidance, which was set at the Treasuries plus 300 bps area.

Proceeds will be used for general corporate purposes, to finance capital expenditures, to refinance the company's 2012 notes, to pay off certain short-term loans and for business expansion.

Friday also featured an issue of notes from Kansas City Southern de Mexico, which provides rail freight services in the Mexican railway system. The company sold $220 million notes due June 15, 2021 at par to yield 6 1/8%, or Treasuries plus 298 bps.

The notes priced at the tight end of talk, which was set at 6 1/8% to 6¼%.

Bank of America Merrill Lynch and JPMorgan were the bookrunners for the Rule 144A and Regulation S notes, which are non-callable for five years and include a make-whole call at Treasuries plus 50 bps.

Proceeds will be used to tender the company's 7 5/8% senior notes due 2013 and 7 3/8% senior notes due 2014.

Finansbank prices above talk

These new deals followed the Thursday pricing of Turkey-based lender Finansbank AS' $500 million 5½% senior notes due May 11, 2016, which came to the market at 99.384 to yield 5.643%, or mid-swaps plus 373.5 bps, a market source said.

The notes priced above talk, which was set at mid-swaps plus 350 bps to 362.5 bps.

"It last traded down at 98.75," a trader said. "It still feels like there are sellers out for it but slowly it's settling around the 98.625 to 98.75 area."

The notes were allocated to far too many intermediaries, the trader said. "Effectively it felt like there were too many loose bonds around," he said.

Said another market source: "I think even my postman got allocated in the new Finansbank deal, as we still have a host of intermediary accounts looking for the bid, even after it's widened by 30 bps. The global readjustment of risk appetite has not helped the latest round of new issues."

Kazkommertsbank sells notes

Also pricing Thursday was Kazakhstan-based lender JSC Kazkommertsbank's $300 million 8½% notes due May 11, 2018 at 99.353 to yield 8 5/8%, a market source said.

JPMorgan and UBS were the bookrunners for the notes, which matched guidance, whispered at 8 5/8%.

"About the only thing going for the new KKB notes is that it's 50 bps over the 2016 dollar notes," a source said.

And China-based business conglomerate Fosun International Ltd. sold $300 million notes due 2016 at par to yield 7½%, according to a company filing.

Goldman Sachs, Standard Chartered Bank and UBS were the bookrunners for the Rule 144A and Regulation S offering.

Proceeds will be used for general corporate purposes, to repay existing debt and to repay a bridge loan from Standard Chartered Bank.

Sharjah Bank plans sukuk

In other deal-related news, the United Arab Emirates-based Sharjah Islamic Bank (SIB) is planning a roadshow for a five-year issue of sukuk notes worth about $300 million, a market source said.

Standard Chartered Bank and HSBC are the bookrunners for the deal.

Also from the Middle East, Dubai and Dubai Water and Electricity Authority were holding in during trading on Friday, a trader said. And Bahrain's 2020 notes were seeing more buyers.

"That remains active," the trader said. "It's at 97.75 bid, 97.98 offered now, which is tighter by 5 bps. There's lots of flipping. There are buyers around."

Elsewhere in the Middle East and Africa, the day was quiet for Abu Dhabi, and buyers were seen for Ghana.

"All told it was a solid week for Middle East paper," a source said.

Meanwhile, Russia's banks were seeing very little selling, even as oil was down 17% from the highs, the trader said.

"That's amazing stuff," he said. "We're seeing good two-way flow along the Alfa Bank curve. In general the theme is outperformance of the 2021s versus the rest of the curve."

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