Baidu sells notes on quiet day ahead of holiday; Sekerbank, Gulf Investment deals ahead

By Christine Van Dusen

Atlanta, Nov. 20 - China's Baidu Inc. priced a $1.5 billion, two-tranche issue of notes on a slow pre-Thanksgiving Tuesday that saw a handful of other emerging markets issuers take steps toward pricing new bonds.

Among the names to advance deals were Turkish lender Sekerbank TAS, China's Beijing Capital Land Ltd., Kuwait's Gulf Investment Corp. and China Construction Bank Corp.

Investor sentiment was fairly positive, following Monday's relief rally connected to the progressing fiscal-cliff talks in the United States.

"The EU summit on Thursday is likely to provide us with more headlines," a London-based analyst said.

The Markit iTraxx SovX index spread started Tuesday's session unchanged, while the corporate index spread was seen tightening by 3 basis points.

In its new deal, internet search provider Baidu priced a $1.5 billion two-tranche issue of senior notes due 2017 and 2022 in a Securities and Exchange Commission-registered deal, a market source said.

The deal included $750 million 2¼% notes due 2017 that priced at 99.929 to yield Treasuries plus 160 bps. The notes were talked at the Treasuries plus 175 bps area.

The second tranche - $750 million 3½% notes due 2022 - priced at 99.849 to yield Treasuries plus 185 bps. Talk was set at the Treasuries plus 200 bps area.

JPMorgan and Goldman Sachs were the bookrunners for the Securities and Exchange Commission-registered deal.

ANZ, Bank of China and Deutsche Bank were the co-managers.

The proceeds will be used to retire $350 million of credit facility debt and for general corporate purposes.

New Ukraine notes trade up

The recent issue of $1.25 billion 7.8% notes due 2022 that Ukraine priced late Monday was somewhat popular in trading on Tuesday, a London-based market source said.

The notes priced at par to yield 7.8%, or Treasuries plus 618.7 bps via JPMorgan, Morgan Stanley, Sberbank and VTB Bank.

"The issue broke today - I'm hearing one good lead order - and last traded up at 100.60," she said.

Svitlana Rusakova of Dragon Capital said, "The new Ukraine '22s can be considered a success as the $1.25 billion issue was reportedly 2.4-times oversubscribed and was placed at a tighter yield compared to initial guidance."

Other bonds from the sovereign have been quiet so far this week, with Ukraine's 2017s 1/4-point higher but without much action, she said.

"A few corporate names adjusted higher," she said.

Beijing Capital roadshow ahead

Property owner Beijing Capital Land is planning a roadshow for a renminbi-denominated issue of notes, a market source said.

HSBC Ltd. is the global coordinator and bookrunner. HSBC and Goldman Sachs (Asia) LLC are the joint lead managers for the Regulation S transaction.

The marketing trip will begin Wednesday in Hong Kong.

Proceeds are earmarked for an escrow account and for working capital and general corporate purposes.

Sekerbank plans marketing trip

Turkey's Sekerbank is planning a roadshow to market a possible issue of public covered bonds, a market source said.

And Kuwait's Gulf Investment set initial price talk at the mid-swaps plus mid- to high-200 bps area for a dollar-denominated issue of benchmark-sized bonds due in 2017, a market source said.

BNP Paribas, Citigroup, National Bank of Abu Dhabi and Standard Chartered Bank are the bookrunners for the Regulation S deal.

Chinese lender gives guidance

Also on Tuesday, China Construction Bank gave guidance in the 3.3% area for its planned renminbi-denominated issue of benchmark-sized bonds due in 2015, a market source said.

CCBI, BNP Paribas, HSBC and ICBC were the bookrunners for the Regulation S deal.

The issuer recently received approval from the China Banking Regulatory Commission and the People's Bank of China to issue up to RMB 40 billion of subordinated bonds.

In August 2011 the company received shareholder approval for up to RMB 80 billion of subordinated bonds. In November 2011 the bank issued RMB 40 billion of bonds.

Alpek rises in trading

From Latin America, the recent $650 million issue of 4½% notes due 2022 that Mexico-based petrochemical company Alpek SAB de CV priced last week was quoted Tuesday at 101½ bid, 102¼ offered.

The notes recently priced at 99.713 to yield Treasuries plus 295 bps via Citigroup, Goldman Sachs, HSBC and JPMorgan in a Rule 144A and Regulation S deal.

And Brazil-based credit and debt card company Cielo SA's new $875 million notes due 2022 traded Tuesday 99 bid, 99.55 offered after pricing at 99.32 to yield 3.8%.

On Monday the notes were seen at 97.85 bid, 98.65 offered.

BB Securities, Bradesco BBI and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S deal.

Some trades seen for QGOG

Brazil-based drilling company QGOG Constellation SA's $700 million issue of 6¼% notes due Nov. 9, 2019 that priced at 98.612 to yield 6½% was sighted Tuesday at 99¾ bid, 100.37 offered.

On Monday, the notes were quoted at 99.65 bid, 100.35 offered.

HSBC, Bank of America Merrill Lynch and Citigroup were the bookrunners for the Rule 144A and Regulation S deal.

Vimpelcom, Evraz in focus

From Russia, Vimpelcom's 2017s are a good buy, according to a report from Barclays, while Ukraine bonds are a good sell.

And one London-based market source was keeping an eye on Evraz Group, which was profiled in a Moody's Investor Service report.

"No major conclusions can be drawn from this report, and we see it as fairly neutral to the spreads," she said. "We are cautious on Evraz due to its continued focus to relax covenants and worsening credit metrics."

BTA moves meeting

From Kazakhstan, troubled BTA Bank issued a press release pushing its creditor meeting to Nov. 30.

"This raises some concern, not only on the timing of completion of the restructuring but also the willingness of credits to accept the proposed terms," a London-based analyst said. "The timing of the restructuring and the rigorous procedures needed to complete the proposed restructuring were too ambitious."

The meeting's delay - it was initially scheduled for Nov. 16 - makes it less likely the lender will finish its restructuring by the planned date of Dec. 21, she said.

Poland notes oversubscribed

In other news, the recent €750 million increase of Poland's existing 3 3/8% notes due July 9, 2024 drew €1.1 billion orders from 90 investors, a market source said.

The deal priced at 101.583 to yield 3.21%, or mid-swaps plus 135 bps, with Commerzbank, HSBC, ING and Societe Generale in a Regulation S deal.

About 40% of the orders came from Germany and Austria, 17% from France, 8% from the United Kingdom, 20% from Central and Eastern Europe, 4% from Benelux nations, 4% from Nordics, 2% from Switzerland, 2% from Asia and 3% from others.

Funds picked up 53%, insurance and pensions 17%, banks 20%, central banks 4% and others 6%.

The original issue of €1.75 billion notes priced in October at par to yield 3 3/8%, or mid-swaps plus 143 bps, in line with talk.

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