BNDES, Bharti Airtel, Peking University Group, KDB print issues; Gazprombank catches a bid

By Christine Van Dusen

Atlanta, Jan. 13 - Brazil's Banco Nacional de Desenvolvimento Economico e Social (BNDES) India's Bharti Airtel Ltd., China's Peking University Founder Group Co. Ltd. and Korea Development Bank were among the issuers to bring new deals to the market on a Monday that saw light trading volumes and slightly wider spreads.

"Lackluster session," a London-based trader said, adding the market was "just struggling a little to keep up, with the 10-year Treasury now back to 2.84%."

The Treasury rate was affected by Friday's non-farm payrolls number, which took a hit and fell to an 18-month low as a result of recent bad weather in the United States. This should, however, pave the way for more issuance, a London-based analyst said.

"This is likely to support the pipeline this week, which we expect to move into full swing, particularly Middle East names," she said.

She's on the lookout for deals from Dubai and its corporates.

"Other rumored names include sovereigns such as Israel, Latvia and Kenya," she said.

Said the London trader: "The window is here for issuance. The market is holding on to very good spread gains on the week and month and rates have rallied in 15 bps."

In trading on Monday, perpetual bonds from Gazprombank were seeing a bid, the analyst said, along with OAO Gazprom paper.

"Plenty of technical bonds in my space that are nigh on impossible to source," the trader said. "Front dates continue to trade very well. Getting harder to find value in this space, but pockets of Bahrain, Kuwait and Dubai look OK."

The 2023 bonds from Emirates Islamic Bank and Abu Dhabi Commercial Bank attracted investor interest, he said, while perpetual notes ticked higher.

"The Majid al-Futtaim Holdings perpetual is going through at 103.875," the analyst said. "Bonds have generally kept up with the move in Treasuries, with Russia and Turkey a couple of basis points tighter across the board."

Africa in focus

Bonds from Africa were a "mixed bag" on Monday, according to a trader.

"The Street is chasing the same bonds and offering the same bonds," he said. "Good start to the year for Nigeria, with sovereign bonds 10 bps 15 bps better on the month."

Gabon's 2024s were popular, trading on Monday with a 103 handle, about 16 bps tighter on the week.

"Zambia is still for sale, almost 30 bps wider on the week now and languishing in the mid-80s, cash price," he said. "Egypt continues to see better buying. It's the best part of 50 bps better on the month."

Paper was also around for Namibia and Senegal, he said.

"Angola has traded two-way this year between 108.1 and 108.5 and she closes at 107.87 to 108.37 today," he said.

Low volumes for LatAm

Looking to Latin America, bonds saw low trading volumes and somewhat wider spreads, a New York-based trader said.

Prices on longer-dated bonds moved up as much as 50 cents while bonds from Argentina weakened again.

"The negative momentum, poor liquidity and concerns about credit put pressure on prices in the thin market," he said.

BNDES sells notes

Brazil-based bank BNDES sold €650 million 3 5/8% notes due Jan. 21, 2019 at 99.292 to yield 3.783%, or mid-swaps plus 260 bps, a market source said.

The notes were talked at a spread in the 265 bps area.

Deutsche Bank, JPMorgan and Santander GBM were the bookrunners for the Rule 144A and Regulation S deal.

Bharti Airtel prices bonds

India-based mobile telecommunications company Bharti Airtel priced a €250 million tap of its 4% notes due Dec. 10, 2018 at 100.374 to yield mid-swaps plus 275 bps, a market source said.

Barclays, BNP Paribas, Deutsche Bank, JPMorgan, Standard Chartered Bank and UBS were the bookrunners for the Regulation S deal.

KDB does deal

Korea Development Bank priced a $1.5 billion two-tranche issue of notes due in 2017 and 2024 in a Securities and Exchange Commission-registered deal, according to a syndicate source.

The deal included $750 million fixed-rate notes that priced at par to yield Libor plus 62.5 bps. The notes were talked at a spread in the Libor plus 65 bps area.

The second tranche totaled $750 million 3¾% 10-year notes that priced at 99.07 to yield Treasuries plus 102.5 bps.

The notes were talked at a spread in the Treasuries plus 105 bps area.

Barclays, BNP Paribas, BofA Merrill Lynch, Citigroup, HSBC, KDB Asia, Morgan Stanley and Standard Chartered Bank were the bookrunners for the deal.

Add-on from Peking University

China-based technology conglomerate Peking University Founder Group priced an RMB 800 million add-on to its existing 5 7/8% notes due Jan. 15, 2017 at 101.2 to yield 5.436%, a market source said.

DBS Bank was the bookrunner for the Regulation S deal.

The original issue of RMB 1.2 billion priced at par to yield 5 7/8%.

Bahamas launches issue

The Commonwealth of the Bahamas has launched a $300 million offering of 10-year notes at a yield of 5¾%, a market source said.

JPMorgan and RBC Capital Markets are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to finance general development in the Bahamas.

Aspial gives guidance

Singapore's Aspial Corp. Ltd. set initial guidance in the 4¾% area for its upcoming issue of Singapore dollar-denominated notes due in three years, a market source said.

DBS is the bookrunner for the deal, which is expected to price this week.

The Singapore-based investment holding company manufactures and retails jewelry, engages in property investment, provides building construction and contracting services and offers pawn brokerage services.

Indian Railway sets roadshow

Indian Railway Finance Corp. Ltd. will set out on Jan. 14 for a roadshow to market up to $600 million of notes, a market source said.

ANZ, Barclays, Deutsche Bank and RBS are the bookrunners for the Regulation S marketing trip.

Indian Railway Finance is a subsidiary of New Delhi-based Indian Railways.

Latvia taps bookrunners

Latvia has mandated Citigroup, JPMorgan and Societe Generale as bookrunners for an offering of seven-year euro-denominated notes, a market source said.

The Rule 144A and Regulation S deal is expected to launch soon.

The sovereign held a roadshow in June for a possible offering of notes via Citigroup, JPMorgan and Societe Generale.

And Singapore's Rickmers Maritime has mandated DBS and HSBC to lead a roadshow starting Tuesday, a market source said.

No other details were immediately available on Monday.

Femsa to issue bonds

Mexico's Coca-Cola Femsa SAB de CV is looking to issue add-ons to it dollar-denominated notes due in 2023 and 2043, according to a company filing.

The deal will include add-ons to the 3 7/8% notes due 2023 and the 5¼% notes due 2043.

The 2023 notes will be part of the same series as, and will be fungible with, the $750 million principal amount of the 3 7/8% senior notes due 2023 that were issued on Nov. 26, 2013.

The 2043 notes will be part of the same series as, and will be fungible with, the $400 million principal amount of the 5¼% senior notes due 2043 that were issued on Nov. 26, 2013.

Citigroup is the bookrunner for the SEC-registered transaction.

The proceeds will be used for general corporate purposes, including the partial refinancing of outstanding debt.

Femsa is a Monterrey, Mexico-based Coca-Cola bottler.

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