Guangzhou R&F, Cheung Kong, New World, Marfrig, JG Summit sell notes; quieter day for EM

By Christine Van Dusen

Atlanta, Jan. 16 - China's Yuexiu Property Co. Ltd., Guangzhou R&F Properties Co. Ltd. and Cheung Kong (Holdings) Ltd., Czech-focused New World Resources plc, Philippines-based JG Summit Holdings Inc. and Brazil's Marfrig Holdings (Europe) BV sold notes as spreads inched wider and activity was somewhat subdued for emerging markets assets.

Several other issuers on Wednesday took steps toward bringing new deals to the market, including Turkey's Sekerbank TAS, Netherlands-based Credit Europe Bank NV, Indonesia's PT Gajah Tunggal Tbk and Russia's OAO Sibur Holding.

The Markit iTraxx SovX index spread started Wednesday's session 2 basis points wider while the corporate index moved out by 3 bps.

"Quiet morning overall," a London-based trader said. "However, there were pockets of life in certain names."

He pointed to bonds from Kuwait and Bahrain, which saw fairly healthy demand.

"Offers are hard to come by," he said. "I'm referring to long-end Bahrain sovereign, which saw good flattening, and the Kipco 2020 and the Burgan Bank 2020."

Meanwhile the recent deals from Qatar National Bank and Qtel International were trading below par on Wednesday.

"Saudi Electricity Co. is steady, at 103¼ and 109 mid on their two bonds," the London trader said. "First Gulf Bank is holding OK. The 2016s look OK on the curve."

International Petroleum Investment Co. (IPIC) and National Bank of Abu Dhabi (TAQA) saw little action on the day, he added.

"The IPIC curve is plus or minus 5 bps, depending on Street position," he said. "In TAQA, the 2023 dollar notes are unchanged, but they're 10 bps wider on the week, whereas the 2016s to 2019s hold very well."

Turkey unchanged

In other trading on Wednesday, bonds from Turkey opened relatively unchanged, a London-based analyst said.

And the recent issue of notes from Russia's Gazprombank OJSC - RUB 20 billion issue of 7 7/8% notes due July 25, 2016 that priced at par - moved tighter during the session.

Barclays, Citigroup and GPB Financial Services Ltd. were the bookrunners for the Regulation S transaction.

Ukraine notes tick down

Most bonds from Ukraine have been moving a bit lower, said Svitlana Rusakova of Dragon Capital.

"But investors were mostly focused on Ukreximbank's new five-year eurobond," she said. "We are expecting to hear placement results shortly but it looks like the bond will come out approximately 175 bps over the sovereign curve."

This triggered demand for other corporates, including Oschadbank, which ended Wednesday at 97¼ bid, 98¼ offered.

Yuexiu sells bonds

In its new deal, Hong Kong-based property developer Yuexiu priced a two-tranche issue of $850 million notes due on Jan. 24 of 2018 and 2023.

The deal included $350 million 3¼% notes due 2018 that priced at 99.831 to yield 3.287%, or Treasuries plus 255 bps. The tranche priced at the tight end of talk, set at Treasuries plus 255 bps to 260 bps.

The second tranche - $500 million 4½% notes due 2023 - priced at 99.459 to yield 4.568%, or Treasuries plus 275 bps. The notes were talked at a spread of 275 bps to 280 bps over Treasuries.

Bank of China, DBS Bank, HSBC and Morgan Stanley were the bookrunners for the Regulation S offering.

The deal is part of the company's $2 billion medium-term note program.

Proceeds will be used for general corporate purposes.

JG Summit prints deal

Philippines-based JG Summit Holdings priced a $750 million issue of 4 3/8% notes due Jan. 23, 2023 at par to yield 4 3/8%, a market source said.

Citigroup, Credit Suisse and HSBC were the bookrunners for the Regulation S deal.

The notes were issued by wholly owned subsidiary JGSH Philippines Ltd., according to a letter to the Philippine Stock Exchange and the Philippine Dealing and Exchange Corp.

JG Summit is a Pasig City-based conglomerate that focuses on air transportation, banking, food manufacturing, petrochemicals, real estate, hotels and property development and telecommunications.

New issue from Marfrig

Marfrig Holdings sold an upsized $600 million 9 7/8% notes due July 24, 2017 at par to yield 9 7/8%.

The notes were talked at the 10% area.

Bank of America Merrill Lynch, Bradesco BBI, BB Securities and Itau BBA were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to extend the company's debt maturity profile and for general corporate purposes.

The notes, which were upsized from $500 million, are guaranteed by Marfrig Alimentos SA, a food processing company based in Sao Paulo.

"The new Marfrig traded up quickly in late-afternoon gray trading, up 1¼ to 11/2," a New York-based trader said.

More Chinese new issues

The primary market also saw China-based multinational conglomerate Cheung Kong print $500 million 5 3/8% perpetual notes at par to yield 5 3/8%, a market source said.

Bank of America Merrill Lynch and Barclays were the bookrunners for the Regulation S deal.

The notes were issued by special-purpose vehicle Mizar Enterprises Ltd., which will be renamed Cheung Kong Bond Securities (03) Ltd.

And China's Guangzhou R&F Properties, through Caifu Holdings Ltd., priced a $400 million issue of 8¾% notes due Jan. 24, 2020 at par to yield 8¾%, or Treasuries plus 753 bps, in line with talk.

Citigroup, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley and UBS were the bookrunners for the Regulation S notes.

The proceeds will be used to refinance existing indebtedness, for land acquisition and for general corporate purposes, according to a company filing.

New World does deal

In its new deal, New World Resources, an Amsterdam-based central European coal producer with operations in the Czech Republic, priced a €375 million issue of 7 7/8% notes due Jan. 23, 2021 at par to yield 7 7/8%.

The notes priced tighter than talk, set at 8% to 8¼%.

Citigroup, Morgan Stanley, Goldman Sachs and Erste Group were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay the company's existing €258 million senior notes due 2015, as well as for fees, expenses and general corporate purposes.

Sekerbank plans notes

On the deal-related front, Turkey-based lender Sekerbank has received approval to issue up to $500 million of bonds, a market source said.

The company recently announced plans for a roadshow to market an issue of public covered bonds.

And Netherlands-based Credit Europe Bank, a lender that serves emerging Europe, China and the United Arab Emirates, set the tenor at 10 years for its dollar-denominated issue of bonds.

Citigroup, Goldman Sachs and HSBC are the bookrunners for the Regulation S-only deal, which is expected to price this week.

Gajah Tunggal, Sibur tap banks

Indonesia-based tire manufacturer Gajah Tunggal has mandated Credit Suisse, Deutsche Bank and HSBC for a roadshow to market a dollar-denominated issue of notes, a market source said.

The roadshow for the Rule 144A and Regulation S deal will begin on Thursday and take place in Asia, Europe and the United States.

And Russian petrochemical company Sibur has mandated Citigroup, JPMorgan, RBS, Credit Suisse, Gazprombank and Sberbank as bookrunners for a roadshow starting Friday, a market source said.

A Rule 144A and Regulation S deal is expected to follow the marketing trip.

KWG Property cancels issuance

In other news, China-based developer KWG Property Holding Ltd. has postponed its dollar-denominated issue of perpetual notes, a market source said.

No other details were immediately available on Wednesday.

Citigroup, Goldman Sachs, HSBC, ICBC, Standard Chartered Bank and UBS were to be the bookrunners for the Regulation S deal.

The proceeds were to be used to refinance existing debt and finance existing and new projects.

KDB deal oversubscribed

Korea Development Bank's recent $1 billion two-tranche issue of notes due on Jan. 22 of 2016 and 2018 was oversubscribed, a market source said.

The deal included $500 million 1% notes due in 2016 that priced at 99.515 to yield Treasuries plus 80 bps. The notes drew $1.5 billion in orders, with 63% from the United States, 21% from the European Union and 17% from Asia.

Fund managers picked up 56%, public institutions and commercial banks 23%, banks 15% and private banks and others 6%.

Barclays, Bank of America Merrill Lynch, Daiwa Capital Markets, Goldman Sachs, HSBC, KDB Asia and UBS Investment Bank were the bookrunners for the Securities and Exchange Commission-registered deal.

Demand for KDB's 2018s

The second tranche of Korea Development Bank's notes - $500 million of 1½% notes due 2018 priced at 98.95 to yield Treasuries plus 97.5 bps - attracted $1.5 billion in orders, with 44% from the United States, 32% from Asia and 24% from the European Union.

Fund managers took up 46%, banks 29%, public institutions and commercial banks 16%, private banks and others 5%, and insurance 4%.

The proceeds will be used for general operations, including extending foreign currency loans, repayment of maturing debt and other obligations.

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