Tanzania prints notes on busy day for EM; ADCB garners attention; market awaits DEWA notes

By Christine Van Dusen

Atlanta, Feb. 27 - The Republic of Tanzania sold notes on a hectic Wednesday for emerging markets assets as investors snapped up the new 2023 notes from Abu Dhabi Commercial Bank PJSC (ADCB) and prepared for issuance from Dubai Electricity and Water Authority (DEWA).

"Busiest day of the week, highlighted by the new ADCB deals breaking at 8 a.m.," a London-based trader said. "The market is doing fairly well."

The Markit iTraxx SovX index spread opened 3 basis points wider on Wednesday, at Treasuries plus 183 basis points. The corporate index tightened by 1 bp, to 234 bps over Treasuries.

"The Italian Election results weighed heavily on investors' sentiment yesterday with European credit indices moving strongly wider," a London-based analyst said. "However, Bernanke's tone in from the Senate suggests he remains dovish and does not see major inflation risks at present. This resulted in a stronger session in US equities yesterday evening."

In response, sovereign bonds from Turkey started Wednesday's session 2 bps to 4 bps tighter. On the corporate side, the front end of bank curves was well bid.

"Russia is similarly opening 2 bps to 3 bps tighter," she said. "Little price movement in high-yielding corporates so far."

From the Middle East, International Petroleum Investment Co.'s (IPIC) 2041s were seen moving 25 bps wider on the month. And Bahrain's bonds were quiet on Wednesday, a trader said.

"The Abu Dhabi National Energy Co. (TAQA) curve continues to trade very well, apart form the 2036s, which are 6 bps wider," he said.

In deal-related news, Colombian banking company Financiera de Desarrollo Territorial SA (Findeter) is expected to issue as much as $500 million of bonds, a market source said.

New issue from Tanzania

In its new deal, Tanzania priced $600 million amortizing notes due March 8, 2020 at par to yield Libor plus 600 basis points, a market source said.

The notes priced in line with talk, set at Libor plus 600 bps area.

Standard Bank was the bookrunner for the Regulation S deal.

"Certainly a few scratching their heads regarding this deal coming prior to a rating and with just one lead," a trader said prior to the pricing. "However, the gray market is so far fairly positive, up almost 2 points."

ADCB 2018s active

Several market sources were particularly interested in the new two-tranche issue of $1.5 billion notes due 2018 and 2023 from Abu Dhabi Commercial Bank.

"Very active start," a London-based trader said.

The Regulation S deal included $750 million 2½% notes due 2018 that priced at 99.636 to yield 2.578%, or mid-swaps plus 165 bps.

Those notes started Wednesday at 99.53 bid, 99.78 offered before moving to 99.62 bid, 99.75 offered. They closed at 99½ bid, 99 5/8 offered.

"The five-year has a lot of loose bonds around and feels fairly poorly placed," the analyst said.

Second tranche performs better

ADCB's second tranche of $750 million 4½% notes due 2023 priced at 99.127 to yield 4.61%, or mid-swaps plus 265 bps.

At the open, the notes were seen at 99.30 bid, 99.80 offered. Later in the European session the notes were quoted at 99.62 bid, 99.87 offered.

"The long-dated 2023s have performed better, trading up roughly 40 cents," the analyst said.

The notes closed Wednesday at 99.62 bid, 99.82 offered.

Abu Dhabi Commercial Bank, Barclays, ING, JPMorgan, National Bank of Abu Dhabi and RBS were the bookrunners.

Dubai's DEWA gets attention

Much of the market's focus was on the upcoming issue of notes planned by Dubai's DEWA, which is looking to price a five-year issue of notes at about 3 1/8%.

Standard Chartered Bank, Citigroup, RBS, Emirates NBD, Dubai Islamic Bank and Abu Dhabi Islamic Bank are the bookrunners for the Regulation S deal.

"DEWA should price their sukuk tomorrow," a trader said.

The proceeds will be used to refinance debt and invest in company projects.

"Saw some nibbling on DEWA 2020s," he said. "Traded close to $10 million today between 122½ and 123."

The 2020s closed Wednesday at 122¾ bid, 123¼ offered.

Investors like Emirates, ADIB

Elsewhere in the Middle East, Emirates airline's 2025 notes saw two-way trading between 100¼ and 1001/2, a London-based market source said.

And the recent perpetual notes that Abu Dhabi Islamic Bank priced at par traded Wednesday at 104 bid, 104.35 offered. On Tuesday the notes closed near 104.

Abu Dhabi Islamic Bank, HSBC, Morgan Stanley, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S-only sukuk.

"ADIB perps caught a bid today, trading as high as 104½ late on," the London-based trader said.

Qatar 'soggy'

Qatar's 2042s traded Wednesday at 121 bid, 122 offered, the London-based trader said.

"Qatar long end still feels soggy," he said.

Some buying was reported for Qatar National Bank's 2018s and National Bank of Abu Dhabi's 2019s, a trader said.

"They are both looking OK," he said. "Kuwait names were quiet today. Overall, higher-beta names were steady but not running away."

Egypt in focus

Investors also had their eyes on Egypt, following the news that the government may soon have permission to issue Islamic bonds and could sell as much as $10 billion annually.

On Wednesday the sovereign's existing 2020s closed at 90 bid, 94 offered after trading Tuesday at the same level.

The 2040 notes that were quoted Tuesday at 86 bid, 90 offered were seen Wednesday at 86½ bid, 90½ offered.

Also from Africa, several sovereigns - including Angola, Nigeria and Senegal - were trading about 5 points off their highs, a trader said.

"Special mention to Gabon, which has held in very well in this pullback," he said. "A decent amount of South Africa's 2041s went through within the 123.25 to 123.75 context."

Citic sells bonds

On Tuesday, China-based telecommunications services provider Citic Telecom International Holdings Ltd. priced a $450 million issue of 6.1% notes due March 5, 2025 at par to yield 6.1%, according to a company filing.

The notes priced in line with talk, set at the 6% area.

Deutsche Bank, Standard Chartered Bank and UBS were the bookrunners for the Regulation S deal.

The proceeds will be used to finance acquisitions.

© 2015 Prospect News.
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