Romania, SK Broadband do deals; market awaits payroll numbers; Dubai, Bahrain get a boost

By Christine Van Dusen

Atlanta, Oct. 21 - Romania and South Korea's SK Broadband Co. Ltd. sold notes on a firm Monday as issuers and investors returned from the Eid holidays and U.S. Treasuries opened flat ahead of the country's non-farm payrolls report.

Among the beneficiaries in the secondary market were bonds from Dubai, Bahrain and perpetual and higher-yielding names.

The Markit iTraxx SovX CEEME ex-EU index spread on Monday opened at 345 basis points over Treasuries.

In trading on Monday, the new 5.55% notes due 2020 that Russian nickel and palladium producer OJSC MMC Norilsk Nickel priced at par moved up about 0.7 points, a London-based analyst said.

"The new Gazprombank '23s and Russian Agricultural Bank '23s are also well bid this morning, in line with Russian names generally," she said.

Looking to Latin America, most spread-based credits hovered near Friday's close while price-based bonds tightened by a few basis points, a New York-based trader said.

"The market feels like it wants to take another leg higher but is clearly timid with tomorrow's non-farm payrolls looming," he said. "Treasuries are getting knocked back and the pipeline is heating up again."

Meanwhile, the pipeline of planned issues began to fill up again, with deals in the works from Russia's OJSC VTB Bank, Dubai's Majid al-Futtaim Holdings LLC (MAF), Dubai's Topaz Energy and Marine Ltd., Chile's Empresa Nacional de Telecommunicaciones SA (Entel) and China's Anton Oilfield Services Group.

"A relatively busy week ahead," the analyst said.

Middle East in focus

Most bonds from the Middle East have seen a pick-up in activity since the holiday period, the analyst said, with many names as much as 5 bps tighter.

And perpetuals have been well bid, a trader said.

"Flow-wise it was steady, with the retail investor base ticking along regionally," he said. "Saw a couple of buyers early in the morning. Still seeing some bids for [Bahrain Telecommunications Co.], having had a poor run over the past four to six weeks."

He also saw demand for Emirates airline's 2023 notes and Dubai Holding's 2017s.

Romania sells notes

In its new deal, Romania has priced a €500 million increase of its existing 4 5/8% notes due 2020 at a yield of 4.15%, a market source said.

Citigroup, Deutsche Bank, HSBC and Societe Generale were the bookrunners for the Regulation S deal.

The original €1.5 billion issue priced in September at 99.16 to yield 4.769%, or mid-swaps plus 295 basis points.

SK Broadband does deal

Also on Monday, South Korea's SK Broadband priced $300 million 2 7/8% notes due 2018 at 99.185 to yield 3.052%, or Treasuries plus 170 bps.

The notes were talked at a spread in the Treasuries plus 175 bps area.

Barclays, Deutsche Bank and HSBC were the bookrunners for the Regulation S deal.

The issuer is a telecommunications company based in Seoul.

Samarco launches

In other deal-related news, Brazil's Samarco Mineracao SA launched a $700 million issue of 10-year notes at a spread of Treasuries plus 330 bps after initial guidance in the Treasuries plus 362.5 bps area, a market source said.

BofA Merrill Lynch, HSBC and Mitsubishi UFJ Securities are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to expand the company's processing, logistics and production facilities.

Samarco is a Belo Horizonte, Brazil-based mining and iron ore company that is joint-owned by Brazil's Vale SA and BHP Billiton plc.

Talk from Dominican Republic

The Dominican Republic set price talk for its $500 million notes due January 2024 in the 6¾% area, a market source said.

Citigroup is leading the Rule 144A and Regulation S transaction.

The proceeds will be used to finance infrastructure projects and to support other sectors of the economy.

VTB gives guidance

Russia-based lender VTB Bank set talk in the mid-swaps plus 240 bps area for its upcoming issue of Swiss franc notes due in 4½ years, a market source said.

Credit Suisse, Commerzbank and VTB Capital are the bookrunners for the deal.

MAF markets bonds

Dubai-based conglomerate MAF will host two investor calls for an upcoming perpetual issue of benchmark-sized and dollar-denominated notes, a market source said.

BofA Merrill Lynch, Emirates NBC, Goldman Sachs, HSBC, JPMorgan and Standard Chartered Bank are the bookrunners for the Regulation S deal.

The calls will take place this week.

MAF previously delayed a sale of dollar-denominated perpetual hybrid notes due to volatile market conditions.

"Majid al-Futtaim is resurrecting their perpetual deal," a London-based trader said. "I suspect possible timing this week."

Topaz on roadshow

Dubai-based oilfield services company Topaz Energy and Marine is on a roadshow for a $350 million issue of five-year notes, a market source said.

The roadshow began Monday in London and will travel to New York and Boston before concluding on Oct. 25 on the West Coast of the United States.

Goldman Sachs, HSBC and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal. Clarkson Capital Markets, DVB Capital Markets, Pareto Securities and RBC Capital Markets are the co-managers.

The proceeds will be used to repay existing indebtedness, fund capital expenditures and to increase cash on the balance sheet.

Roadshow for Entel

Chile-based telecommunications company Entel has mandated Citigroup and HSBC to arrange a roadshow for a dollar-denominated issue of notes, a market source said.

The roadshow for the Rule 144A and Regulation S issue of notes will take place in the United States, Europe and Latin America.

And Russia-based lender Gazprombank is on a roadshow for an issue of euro-denominated issue of Regulation S notes with Citigroup, Credit Agricole, Deutsche Bank and GPB Financial Services.

South Africa non-deal roadshow

South Africa has mandated Deutsche Bank and Investec to arrange a non-deal roadshow starting on Oct. 28, a market source said.

The roadshow will begin in London and travel to Boston before concluding in New York on Nov. 1.

No other details were immediately available on Monday.

Pakistan, Anton Oilfield notes

China's Anton Oilfield Services Group is looking to issue dollar-denominated notes with bookrunners Citigroup and Morgan Stanley, a market source said.

The proceeds from the Rule 144A and Regulation S issue will be used for general corporate purposes.

And Pakistan is considering an issue of notes.

Mexim postpones issuance

Export-Import Bank of Malaysia Bhd. (Mexim) has postponed its planned issue of dollar-denominated Islamic bonds, a market source said.

BNP Paribas, CIMB, HSBC and Maybank were the bookrunners for the deal.

No other details were immediately available on Monday.

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