Issuance from China Construction; Ukraine elections ahead; Masisa trades up; Kipco 'solid'

By Christine Van Dusen

Atlanta, May 19 - China Construction Bank Corp. sold notes on Monday as most emerging markets bonds held up well in trading, even as Ukraine braced for more tension ahead of next week's presidential election.

"Over the weekend we had several headlines from the Donetsk separatists who claimed they will hold their own elections in September," a London-based analyst said. "They also reiterated that they will ask to join Russia and that the Ukrainian presidential election will not take place in the region."

The United States and European Union are not expected to take action before the election, she said.

"Any disruptions [to the election] that can be attributed to Russia will greatly increase the possibility of larger sanctions," she said.

Against this backdrop, most emerging markets bonds tightened slightly, she said.

"But few moves of any significance," she said.

Looking to Latin America, trading was mostly quiet, a New York-based trader said, with Brazil-based Petrobras bonds widening slightly.

Bonds from Peru continued to be bid and paper remained scarce, he said, particularly from banks and corporates.

The recent issue of 9½% notes due in 2019 that Chile-based Masisa SA priced at par traded Monday with a 106 handle, he said.

Deutsche Bank, Itau BBA, JPMorgan and Scotiabank were the bookrunners for the Rule 144A and Regulation S deal.

From the Middle East, flows were fairly balanced, with pockets of activity, a London-based trader said.

"As usual, the same bonds were bid, and the same bonds were for sale," he said. "Perpetuals, if anything, were a little better offered."

Kipco performs

The 2016 and 2019 bonds from Kuwait Projects Co. (Kipco) performed well during the session, a trader said.

"The 2016s are finally picking up some pace," he said. They've moved 40 basis points tighter over the month," he said. "Kipco 2019s are a solid 15 bps tighter on the month."

Chinese Bank sells notes

For its new deal, Beijing-based China Construction Bank sold RMB 1.5 billion 3.38% notes due May 28, 2016 at par to yield 3.38%, a syndicate source said.

The notes were talked at a yield in the 3.4% area.

CCB International, Commerzbank, BNP Paribas and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Haitong sets marketing trip

China's Haitong Securities Co. Ltd. will set out on Tuesday for a roadshow to market a renminbi-denominated issue of notes, a market source said.

Standard Chartered Bank and Haitong International are the joint global coordinators, joint bookrunners and joint lead managers. ICBC International, HSBC, UBS, BNP Paribas, BOC International and Deutsche are the joint bookrunners and joint lead managers.

The Regulation S notes will be issued by Unican Ltd.

The roadshow will be held in Hong Kong and Singapore.

Roadshow for Dar Al-Arkan

Saudi Arabia's Dar Al-Arkan Real Estate Development Co. on Tuesday will set out on a roadshow to market a potential issue of Islamic bonds, a market source said.

The company previously held a non-deal roadshow with Al Khair Capital, Deutsche Bank and Goldman Sachs.

CAF schedules investor call

Venezuela's Corporacion Andina de Fomento has mandated BBVA, Credit Agricole CIB, Credit Suisse, Deutsche Bank and HSBC as bookrunners for a euro-denominated issue of notes that will be discussed during an investor call, a market source said.

The investor call will take place on Tuesday.

A Regulation S deal is expected to follow.

Corporacion Andina de Fomento is a lender based in Caracas, Venezuela.

Tanzania revises plan

The Republic of Tanzania has again revised its plans for a dollar-denominated issue of notes, this time pushing the timing to the second half of the year, a market source said.

The sovereign first announced plans for up to $2 billion of notes during 2013 and then changed the size to a maximum of $700 million and the timing to the first half of 2014.

In February, Tanzania was looking at a deal size of between $500 million and $1 billion.

No other details on the new plans were available on Monday.

Kenya on deck

Kenya is expected to issue bonds before the end of June, a market source said.

No other details were immediately available on Monday.

Market sources were whispering on Monday about a possible issue of notes from Commercial Bank of Qatar.

"That would be nicely welcome, as their existing bonds are tricky to source and it would be a welcome test of the Qatari bank bid," a trader said.

Chinese corporate prints bonds

On Friday, China's Shenzhen Overseas Chinese Town Co. Ltd. sold RMB 1 billion 4¾% notes due May 22, 2017 at par to yield 4¾%, a market source said.

The notes were talked at a yield in the 4 7/8% area.

ICBC (Asia), UBS, DBS Bank and CCB International were the bookrunners for the Regulation S deal.

The issuer is a tourism, properties and commodities company based in Shenzhen.

Guotai Junan does deal

China's Guotai Junan International Holdings Ltd. sold $500 million 3 5/8% notes due 2019 at 99.624 to yield 3.708%, or Treasuries plus 215 bps, a market source said.

The notes were talked at a spread in the 220 bps area.

Bank of China, Guotai Junan Securities, HSBC, Agricultural Bank of China, Bank SinoPac, Mizuho Securities, Standard Chartered Bank and Wing Lung Bank were the bookrunners for the Regulation S deal.

The proceeds will be used to meet the group's business operation needs, adjust debt structure, supplement working capital and make investments.

Guotai Junan is a Hong Kong-based investment holding company.

Midas releases final book

The final book for Singapore-based Midas Holdings Ltd.'s new S$75 million issue of 21/2-year notes was more than S$100 million from 35 accounts, a market source said.

About 97% of the orders came from Singapore and 3% from Hong Kong.

Private banks accounted for 86%. The remaining 14% was bought by banks, fund managers and others.

The notes priced at par to yield 6% with DBS Bank and HSBC in a Regulation S deal.

The proceeds will be used for general corporate purposes, including refinancing existing borrowings and financing acquisitions, investments and working capital and capital expenditure requirements.

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