Russia bonds weaken; Slovenia stays flat; Future Land, Promsvyazbank seek issuance

By Christine Van Dusen

Atlanta, July 14 – Bonds from Russia were slightly weaker on Monday as tensions with Ukraine ramped up again, with claims that a Ukrainian shell crossed the Russian border and killed a citizen.

“Fighting continues in Eastern Ukraine,” a London-based analyst said.

In response, credit default swap spreads for Russia moved out about 2 basis points, she said.

“Elsewhere, [emerging markets] generally feels unchanged,” she said.

Slovenia, for example, didn’t see any changes in its bond spreads, even after the weekend’s election.

Bonds from Serbia, however, did widen by about 5 bps on the news that the finance minister may be resigning, she said.

In other trading, the 6½% Islamic bonds due 2019 that Saudi Arabia’s Dar Al-Arkan Real Estate Development Co. priced at 98.953 to yield 6¾% were spotted at 101½ bid, 102½ offered, a trader said.

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.

Saudi Arabia’s Saudi Basic Industries Corp. (Sabic) saw its 2¾% notes due 2020 – priced at 99.28 to yield mid-swaps plus 135 bps – trade on Monday at 105.62 bid, 106.62 offered, he said.

Credit Agricole, ING, JPMorgan, Mitsubishi UFJ and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Dubai-based Emaar Properties saw its 6.4% notes due 2019 that priced at par move on Monday to 113.62 bid, 114.12 offered, a trader said.

The notes came to the market at a spread of mid-swaps plus 519.3 bps via Al Hilal Bank, Barwa Bank, Dubai Islamic Bank, Emirates NBD Capital, HSBC, Noor Islamic Bank and Standard Chartered Bank in a Regulation S-only deal.

Batelco, Bahrain tick up

Bahrain Telecommunications Co. BSC’s (Batelco) 4¼% notes due 2020 that priced at 99.45 to yield 4.342% traded Monday at 99.62 bid, 100.37 offered, a trader said.

BNP Paribas and Citigroup were the bookrunners for the Regulation S-only deal, which priced at a spread of 325 bps over Treasuries.

The Kingdom of Bahrain’s 6 1/8% 2022 bonds that priced at 99.867 to yield 6.143% were quoted Monday at 109 bid, 109¾ offered, he said.

The notes came to the market at mid-swaps plus 437.5 bps with bookrunners Citigroup, Gulf International Bank, JPMorgan and Standard Chartered Bank in a Rule 144A and Regulation S deal.

Arauco completes roadshow

Chile’s Celulosa Arauco y Constitucion SA on Monday completed a roadshow for a possible issue of notes, a market source said.

JPMorgan, Santander and Scotiabank are the bookrunners for the Rule 144A and Regulation S transaction.

Celulosa Arauco is a pulp and forestry company based in Santiago, Chile.

Future Land plans offering

China’s Future Land Development Holdings Ltd. is planning a dollar-denominated issue of notes, according to a company filing.

JPMorgan and Credit Suisse are the joint global coordinators. JPMorgan, Credit Suisse Securities, UBS, BNP Paribas, CLSA and China Merchants Securities are the bookrunners for the Regulation S deal.

The proceeds will be used to fund the acquisition of land for residential and commercial property development and for general corporate purposes.

Future Land Development is a Hong Kong-based real estate operator and developer.

Promsvyazbank ponders issuance

Russia’s Promsvyazbank could issue dollar-denominated notes due in 2021 as part of an exchange offer, according to an announcement from the Moscow-based lender.

Goldman Sachs, ING Bank and Promsvyazbank are the dealer-managers.

The notes are expected to settle on or near July 30.

Greek bank could print notes

Greece’s Black Sea Trade and Development Bank is looking to issue euro-denominated notes this fall, a market source said.

No other details were immediately available on Monday.

The company is a financial and development institution based in Thessaloniki.

Tupi sells notes

On Friday, Brazil’s Cimento Tupi SA priced $350 million 6 5/8% notes due July 17, 2024 at par to yield 6 5/8%, a market source said.

The notes were talked in the 7% area.

BB Securities, Bradesco BBI, Citigroup and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to prepay debt and for general corporate purposes.

The issuer is a Sao Paulo-based cement products and services company.

Baroda attracts orders

The final book for India-based Bank of Baroda’s $250 million 4 7/8% notes due 2019 was more than $1 billion, a market source said.

The notes priced at 105.192 to yield 3.732%, or Treasuries plus 203 bps, with HSBC and Standard Chartered Bank.

About 91% of the orders came from Asia and 9% from Europe, with 47% from banks, 27% from fund managers, 13% from the public sector, 9% from insurance and 4% from private banks.

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