Yanlord, Masisa sell notes; investors eye sanctions against Russia; Turkey remains strong

By Christine Van Dusen

Atlanta, April 28 - Singapore's Yanlord Land Group Ltd. and Chile's Masisa SA sold notes on Monday as emerging markets bonds responded positively to plans for new sanctions against Russia for its activities related to Ukraine.

"A fairly tricky day, all told, but busy nonetheless," a London-based trader said.

The United States on Monday announced it would impose sanctions on specific Russian government officials and more than a dozen companies. The European Union was expected to follow with sanctions of its own.

"Our expectations are that they will not be as harsh as the American ones," a London-based analyst said.

Russian credit default swaps opened Monday about 8 basis points wider, then tightened as the morning went on, she said.

"The eurobond market will try to slow the pace of decline accumulated last week, although the dynamics of quotations will be under pressure due to concerns about the imposition of new sanctions," according to a report from UFS Investment Co.

A potential collapse of the coalition in Slovenia could make matters worse, according to a report from Erste Group Research.

"The incumbent prime minister is facing a leadership challenge," the report said.

Meanwhile, bonds from Turkey stayed strong as investors pulled money out of Russia, the analyst said.

"The Middle East remains steady, and this week should see [Abu Dhabi National Energy Co.] approach the market," she said.

Dubai Electricity and Water Authority's bonds were particularly active on Monday, the London-based trader said.

"Local demand today on my 2015s and 2020s, but they're not exactly racing higher and tighter," he said.

Dubai moves down

In other trading from the Gulf region, Dubai's recent issue of 5% notes due April 30, 2029 that priced at par opened Monday at 99 5/8 bid, 99 7/8 offered, a trader said.

The notes came to the market at mid-swaps plus 177.1 bps via Dubai Investment Bank, Emirates NBD Capital, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank in a Regulation S deal.

As the morning went on, the notes slipped further, moving to 99.70, then 99 5/8, then 99½ - moves that the trader found puzzling.

"About 99.30 was the low I traded on these ones, having hit 100 1/8 at the high last week," he said. "Few loose bonds around."

Mubadala ticks higher

The recent issue of notes from Abu Dhabi's Mubadala Development Co. PJSC - $750 million 3¼% notes due April 28, 2022 that priced at 98.53 - ticked a little bit higher on Monday, the London trader said.

The notes came to the market last week to yield 3.462%, or Treasuries plus 120 bps with BofA Merrill Lynch, Credit Agricole, Deutsche Bank, Goldman Sachs, HSBC and National Bank of Abu Dhabi in a Rule 144A and Regulation S transaction.

Middle East in focus

The London trader was keeping an eye on Saudi Arabia's Dar Al-Arkan Real Estate Development Co., which held a non-deal roadshow with Al Khair Capital, Deutsche Bank and Goldman Sachs to discuss its first-quarter results and future projects.

"They seem to have regained their footing after the investor updates announcement," he said. "The 2018s are going through at 99."

Also on Monday, perpetual notes from the Middle East received some attention, with the notes from Abu Dhabi Islamic Bank and Dubai Islamic Bank ticking up about 25 cents, he said.

The perpetual notes from United Arab Emirates-based GEMS MEA Sukuk Ltd. moved lower on some client selling, he said.

The $200 million 12% perpetual notes priced at par to yield 12% with Abu Dhabi Islamic Bank, Credit Suisse and Morgan Stanley in a Regulation S deal.

Yanlord sells notes

Singapore-based developer Yanlord Land priced S$400 million 6.2% notes due May 8, 2017 at par to yield 6.2%, a market source said.

The notes were talked at a yield in the 6½% area.

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

The proceeds will be used for refinancing a 2010 revolving credit facility, the 2011 credit facility and a shareholder loan.

Masisa does deal

Chile's Masisa priced a $300 million issue of notes due in 2019 at a yield of 9½%, a market source said.

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

Other details were not immediately available on Monday.

Masisa is a Santiago-based producer of wood boards and other wood products.

Country Garden seeks issuance

China's Country Garden Holdings Co. Ltd. is looking to issue notes with bookrunners Goldman Sachs, JPMorgan, Bank of China International and HSBC, according to a company filing.

The proceeds from the Rule 144A and Regulation S deal will be used to refinance the company's 2017 notes and for other existing indebtedness, as well as for general corporate purposes.

Country Garden is a Foshan, China-based real estate developer focused on large-scale residential communities.

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