New issues from Qtel, Sime Darby, Singapore HDB; demand for Dubai notes; spreads tighten

By Christine Van Dusen

Atlanta, Jan. 23 - Qatar Telecom QSC (Qtel), Malaysia's Sime Darby Berhad Bhd and Singapore's Housing and Development Board priced notes on a mostly positive Wednesday amid tighter spreads for emerging markets assets.

The Markit iTraxx SovX index spread started the session about 2 basis points tighter while the corporate index narrowed by 1 bp.

"Turkey continues to outperform Russia in the sovereign and corporate space," a London-based analyst said.

And sovereign bonds from Ukraine started out quiet before rallying a bit, with the 2020s seen at 105 bid, 106 offered and the 2021s moving up to 106½ bid, 107½ offered, said Svitlana Rusakova of Dragon Capital.

"Corporates were also active," she said. "High-yield names remain in demand."

But most of the action on Wednesday was focused on the recent $750 million 10-year and $500 million 30-year notes from Dubai.

"They're closing at pretty much the lows of the day, where I must have seen seven sellers for every buyer, with those in the book looking to make their quick buck and move on," a London-based trader said. "Once the loose bonds clear, I think the bonds should be OK."

The 2023s, which priced at par, moved to 100.90 early in the session before closing at 100.10 to 1001/4. The 2043s that priced at 98.148 saw a high print on Wednesday of 1003/4, then closed lower.

Also of interest was Qtel's two-tranche issue of $1 billion notes due 2028 and 2043.

"Both tranches were very popular in the gray market, moving up 1 point on the 15-year and almost 2 points on the 30-year," the London-based trader said. "The performance after the break of the 2025s in 2010 is but a distant memory in this sea of liquidity and cash."

Qtel sells notes

Bank of America Merrill Lynch, Citigroup, JPMorgan and QNB Capital were the bookrunners for Qtel's Rule 144A and Regulation S transaction.

The deal included $500 million 3 3/8% notes due 2028 that priced at 98.834 to yield Treasuries plus 215 bps.

The second tranche, $500 million 4½% notes due 2043, priced at 97.687 to yield Treasuries plus 162.5 bps.

Middle East in focus

In other news from the Middle East, the perpetual notes from Abu Dhabi Islamic Bank saw some interest and moved a touch higher in trading, a trader said.

"I generally have seen Asian sellers and international and regional buyers on this," he said.

Bonds from Dubai Holding also were popular on Wednesday, and two-way activity was noted for Dar al-Arkan Holdings.

"Emaar Properties, Jafza Holdings and Dubai Water and Electricity Authority seem to have paused for breath after the storming first week," a trader said. "Much more two-way and, if anything, better sellers around."

Investors like Dubai 2023s

The final book for both tranches of notes from Dubai was a combined $14.8 billion, a market source said.

The 10-year tranche of $750 million 3 7/8% Islamic bonds priced at par to yield 3 7/8%. The bookrunners were Dubai Islamic Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank.

The tranche's final book was $11 billion from 340 investors.

About 52% of the orders came from the Middle East, 7% from Asia, 12% from Europe not including the United Kingdom, 26% from the United Kingdom and 3% from the United States.

Banks picked up 46%, funds 34%, private banks 10% and others 10%.

Dubai 2043s oversubscribed

The 30-year tranche of Dubai's new Regulation S deal drew $3.8 billion from 200 investors.

The $500 million 5¼% conventional notes priced at 98.148 to yield 5 3/8% via Emirates NDB Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank.

About 12% of the orders came from the Middle East, 4% from Asia, 24% from Europe outside the United Kingdom, 38% from the United Kingdom and 22% from the United States.

Banks accounted for 12%, funds 79%, private banks 8% and others 1%.

Sime Darby does deal

In its new deal, Malaysia-based conglomerate Sime Darby priced a two-tranche issue of $800 million notes due 2018 and 2023 in a Regulation S deal, a market source said.

The deal included $400 million 2.053% notes due 2018 that priced at par to yield Treasuries plus 130 bps. The notes were talked at a spread in the Treasuries plus 135 bps area.

The final book was $4.2 billion from 184 accounts, with 83% from Asia and 17% from Europe and the Middle East.

About 65% of the orders came from asset and fund managers, 19% from banks, 10% from insurers, 4% from the public sector and 2% from private banks.

Notes attract orders

The second tranche of Sime Darby's new issue, $400 million 3.29% notes due 2023, priced at par to yield Treasuries plus 145 bps. The notes were talked at the Treasuries plus 150 bps area.

The final book was $4.5 billion from 192 accounts, with 57% from Asia and 43% from Europe and the Middle East.

Asset and fund managers picked up 50%, banks 19%, the public sector 15%, insurers 14% and private banks 2%.

Citigroup, HSBC Amanah Malaysia, Maybank Investment Bank and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Proceeds will be used to finance capital expenditures, working capital requirements and general corporate purposes.

Notes from Singapore issuer

In another new deal, Singapore-based Housing and Development Board printed a S$1 billion issue of 1.23% notes due 2018 at par to yield 1.23%, a market source said.

BNP Paribas, Deutsche Bank, DBS, HSBC, Standard Chartered Bank and United Overseas Bank were the bookrunners for the deal.

Sibur sets talk

Russia-based petrochemical company OAO Sibur Holdings has set price talk at the mid-swaps plus 310 bps area for its benchmark-sized issue of dollar-denominated notes due in five years, a market source said.

Citigroup, JPMorgan, RBS, Credit Suisse, Gazprombank and Sberbank are the bookrunners for the Rule 144A and Regulation S deal.

"As a one-off issuer with no significant funding pressure at this stage, and the likely interest from local investors, the company is pricing this debut issue fairly aggressively," the London-based analyst said. "We like the credit fundamentals. However, we view the current guidance for a cyclical high-yield issuer as too tight, leaving no upside for investors."

Russian bank talks notes

Also from Russia, OJSC Russian Agricultural Bank set price talk at 3.6% to 3.7% for its renminbi-denominated issue of benchmark-sized notes due in three years (Baa1//BBB), a market source said.

JPMorgan and RBS are the bookrunners for the Regulation S deal.

The lender has headquarters in Moscow.

China Railway taps bookrunners

China Railway Group Ltd. has mandated Bank of China International, Standard Chartered Bank, Barclays, Deutsche Bank, HSBC and UBS for a roadshow to market an issue of dollar notes, a market source said.

The roadshow will begin on Thursday and take place in Hong Kong, Singapore and London.

In May the Beijing-based construction group announced plans to issue corporate and offshore bonds. The proceeds from the Rule 144A and Regulation S offering will be used as working capital for offshore investment projects and offshore large-scale construction projects.

Fosun gives guidance

China's Fosun International Ltd. set talk at the 7¼% area for a planned dollar-denominated issue of benchmark-sized seven-year notes, a market source said.

HSBC, Standard Chartered Bank and UBS are the bookrunners for the Regulation S deal.

The proceeds will be used to refinance indebtedness, for working capital and for general corporate purposes, according to a company filing.

The notes are non-callable for four years.

Fosun is a Shanghai-based conglomerate.

Greentown, Akbank pick leads

Property developer Greentown China Holdings Ltd. has mandated Deutsche Bank, Bank of China International, Goldman Sachs, HSBC, ICBC (Asia), Standard Chartered Bank and UBS as bookrunners for a possible issue of dollar notes, a market source said.

The Regulation S deal will be marketed during a roadshow beginning Thursday.

And Turkish lender Akbank TAS has mandated Bank of America Merrill Lynch, Citigroup, Deutsche Bank, HSBC and JPMorgan as bookrunners for a roadshow to market up to $1 billion of eurobonds.

No other details were immediately available on Wednesday.

Colombian names print notes

This activity followed the Tuesday pricing of the Republic of Colombia's $1 billion issue of 2 5/8% notes due March 15, 2023 at 99.179 to yield 2.718%, or Treasuries plus 88 bps.

Deutsche Bank Securities and Goldman Sachs & Co. were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general budgetary purposes.

And Colombian lender Banco Davivienda SA priced a $500 million issue of 2.95% notes due Jan. 29, 2018 at 99.742 to yield Treasuries plus 225 bps, a market source said.

Credit Suisse and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Longfor sells bonds

Tuesday also saw China-based investment holding company Longfor Properties Co. Ltd. print a $500 million issue of 6¾% notes due Jan. 29, 2023 at par to yield 6¾%.

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

Citigroup, HSBC, Morgan Stanley and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The proceeds will be used for refinancing and for general corporate purposes.

Sizeable book for Shinhan

Korea-based lender Shinhan Bank's recent $350 million 1 7/8% notes due 2018, which priced at 99.197 to yield mid-swaps plus 127.5 bps, was oversubscribed.

The deal attracted more than $2 billion from more than 140 accounts, with 67% of the orders from Asia, 18% from Europe and 15% from the United States.

Fund and asset managers snapped up 40%, banks 34%, the public sector 20%, private banks 5% and others 1%.

ANZ, Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank, HSBC, JPMorgan and Mizuho Securities were the bookrunners for the Rule 144A and Regulation S deal.

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