Croatia sells bonds; Russia, China gas deal tightens Russian notes; Abu Dhabi 'impressive'

By Christine Van Dusen

Atlanta, May 22 - Croatia sold notes on Thursday as China and Russia signed a headline-grabbing gas supply deal, moving many Russian bonds tighter.

"We still await details on the exact price paid, but the market has responded well, with bonds trading up," a London-based analyst said. "They're up to 14 basis points tighter in the long end. Russia is performing well this morning, with good buyers of particular names."

Among those names was Russian steel producer OAO TMK, which is expected to supply the pipes for the gas project, she said.

"Bonds are up circa 2 points," she said.

Also making some moves on Thursday was Russian commodity trading house Gunvor, which disputed reports that it was going to be purchased by Russia-based oil company Rosneft OAO.

"The move has been somewhat limited," the analyst said.

Bonds from Central and emerging Europe were "a little weak, affected by European peripheral weakness, with few buyers," the analyst said.

Bonds from Bahrain saw bids, he said, with the 2022s and 2023s "super solid."

"Other flows saw Qatar names trade well again," he said. "Qatar National Bank had a little bit of paper around, but nothing material."

Notes from Abu Dhabi were "impressive again," he said. "International Petroleum Investment Co., Abu Dhabi National Energy Co. (TAQA) and Mubadala are super well-supported, along with Dolphin Energy's 2021s."

And buyers were seen for Emirates airline, especially its 2025 dollar bond, he said.

"A drop-off in liquidity tomorrow, then the holiday on Monday leaves a shortened last week of May," he said.

Recent issue ticks up

In other trading on Thursday, Saudi Arabia-based Dar Al-Arkan Real Estate Development Co.'s recent issue of 6½% Islamic bonds due May 28, 2019 was spotted at 99.06 bid, 99.56 offered, a trader said.

Then notes priced at 98.953 to yield 6¾%, following talk of a 6¾% yield.

Bank Alkhair, Deutsche Bank, Emirates NBD Capital and Goldman Sachs were the global coordinators and joint bookrunners. Al Hilal Bank, Barwa Bank, Al Rayan Investments and Qinvest were joint bookrunners for the Regulation S deal.

"Some sellers let go of paper near lunchtime, and we backed off to 99.12, but then came back to close at 99¼ bid, 99½ offered," a trader said. "A decent effort - at the expense, however, of the secondary 2016s and 2018s."

The 2016s are 30 bps wider on the month while the 2018s are 50 bps wider on the month.

"Very busy day with, on balance, fairly even flow," a London-based trader said.

Croatia sells notes

In its new deal, Croatia sold €1.25 billion 3 7/8% notes due May 30, 2022 at 99.044 to yield mid-swaps plus 270 bps, a market source said.

The notes were first talked at a spread in the 285 bps area, then revised to the 275 bps area.

Banca IMI, Deutsche Bank, JPMorgan and Societe Generale CIB were the bookrunners for the Regulation S deal.

Inbursa sets roadshow

Mexico's Banco Inbursa, SA, Institucion de Banca Multiple, Grupo Financiero Inbursa (Banco Inbursa) will set out on May 26 for a roadshow to market a dollar-denominated issue of notes, a market source said.

Credit Suisse, BofA Merrill Lynch and Citigroup are the bookrunners for the Regulation S deal.

Following investor calls on Friday, Inbursa will take the roadshow to London and Boston before concluding on May 28 in New York and Los Angeles.

The issuer is a banking company based in Mexico City.

Nan Fung seeks issuance

China's Nan Fung International Holdings Ltd. is looking to issue dollar-denominated notes, a market source said.

The notes will be issued by wholly owned subsidiary Nan Fung Treasury Ltd.

No other details were immediately available on Thursday.

Nan Fung develops residential and commercial properties in Hong Kong.

Empresas ICA does deal

On Wednesday, Mexico's Empresas ICA SAB de CV priced a $700 million issue of 8 7/8% notes due May 29, 2024 at 97.904 to yield 9.2%, a market source said.

The notes were initially talked at a yield in the mid-9% area.

Barclays, Credit Suisse, Deutsche Bank and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay certain indebtedness and fund a tender offer.

ICA is a Mexico City-based construction company.

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