Bank Asya, Star Energy, Alam Sutera, UkrLand, others sell notes; Cyprus concerns remain

By Christine Van Dusen

Atlanta, March 21 - Turkey's Asya Katilim Bankasi AS (Bank Asya), Indonesia's Star Energy Geothermal (Wayang Windu) Ltd., Indonesia's PT Bank Rakyat Indonesia (Persero) TBK, Indonesia's PT Alam Sutera Realty, and Ukraine's MHP SA and UkrLandFarming priced notes on a Thursday that was active in the morning but faded as Cyprus' financial woes continued to dominate headlines.

"Good bids in the Street on high-grade, well-rated, front-dated bonds," a London-based trader said. "Some are tricky sourcing."

The Markit iTraxx SovX CEEMEA ex-EU index opened Thursday at Treasuries plus 206 basis points, wider by 2 bps. And the corporate index - seen Wednesday at 233 bps over Treasuries - moved 1 bp tighter to 232 bps on Thursday.

"Yesterday saw no real progress in the Cyprus crisis, although it has been reported that the Cypriot president is to draft a new funding plan including a revised deposit levy," a London-based analyst said. "Negotiations with Russia appear to have stalled along with denials from Gazprombank and VTB that they would make acquisitions in the Cypriot banking sector."

VTB has also said that it would reevaluate its strategy in Cyprus if the proposal to tax deposits is accepted.

"Russian banks have suffered recently, with the VTB curve 20 bps to 30bps wider yesterday and Sberbank, Gazprombank and others also affected," the analyst said. "Corporates were not immune, with Gazprom and VimpelCom also widening yesterday."

But on Thursday, Russian corporates fared better, she said. And bonds from Turkey were unchanged while paper from the Middle East and North Africa had a busy day.

The recent $500 million issue of 2½% notes due 2018 from Oman-based BankMuscat - which priced at 99.302 to yield mid-swaps plus 170 bps - was seen early Thursday at 99.375.

The Regulation S notes via Citigroup, Credit Agricole CIB, Deutsche Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank closed Thursday's session at 99.37 bid, 99.47 offered.

Better bid for perpetual notes

Perpetual notes from the Middle East caught a better bid on Thursday, the analyst said.

The recent $1 billion issue of 6 3/8% perpetual notes from Abu Dhabi Islamic Bank that priced at par was trading Thursday at 100.18 bid, 100.68 offered.

Abu Dhabi Islamic Bank, HSBC, Morgan Stanley, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S-only sukuk.

Busy day for Qtel

Qatar-based Qtel International's curve remained active, the London trader said.

"Even saw some Street demand on the 2043 before some Street selling of Qatar's 2042 stopped it in its tracks," he said.

The sovereign's 2042s traded as low as 117.75, which translates to a 25 bps move wider on the month.

Some small buying was noted for Dubai corporates, including Majid al Futtaim Holding and Dubai Holding, he said. And Saudi Electricity Co.'s 2022s generated some interest.

Middle East in focus

Also from the Gulf region, Bahrain's 2014s traded in the high 105s.

"It's a sovereign, fixed-rate sukuk," a trader said. "Short-dated, so I'm surprised it hasn't been more popular before today."

International Petroleum Investment Co.'s 2041s had a better day in trading while Abu Dhabi National Energy Co. (TAQA) saw more two-way activity for its notes, he said.

"Lebanon continues to languish, only seeing sellers," he said.

Emirates active, ADCB 'superb'

Another issue from the Middle East was active in trading on Thursday. The recent $1 billion 3 7/8% amortizing Islamic bonds that Dubai's Emirates airline priced at 99.331 was seen trading at 98.70 bid, 99.20 offered.

Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Citigroup, Dubai Islamic Bank PJSC, Emirates NBD Capital Ltd. and Standard Chartered Bank were the bookrunners for the Regulation S-only sukuk.

The recent 4½% notes due 2023 from Abu Dhabi Commercial Bank - which priced at 99.127 - were up 3 points from issue while the company's new 2½% 2018s that priced at 99.636 moved up just 40 cents.

"ADCB's 2023s are a superb effort," the analyst said.

Said a trader: "Amazing performance, this bond. Still seeing demand."

Egypt gets downgrade

From Africa, Egypt's government bond rating was cut by Moody's Investors Service from B3 to Caa1.

In response, the sovereign's 2020s traded Thursday at 88 bid, 91 offered. The 2040s were seen at 81 bid, 83 offered.

"Not a great day, week, month for Egypt," a trader said.

"The 2040s traded at 8.71% yield."

Bank Asya sells bonds

In its new deal, Turkey's Bank Asya priced a $250 million issue of 7½% notes due March 28, 2023 at par to yield 7½%, a market source said.

The notes priced in line with talk, set at the mid-7% area.

The Regulation S notes were issued by Asya Sukuk Co. Ltd. via BofA Merrill Lynch, ENBD Capital, HSBC and National Bank of Abu Dhabi.

MHP prints notes

Thursday also saw new notes from Ukraine-based poultry producer MHP. It sold $750 million 8¼% notes due April 20, 2020 at par to yield 8¼%, or Treasuries plus 697 bps, a market source said.

The notes matched talk, set at 8¼%.

JPMorgan, Morgan Stanley and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

UkrLandFarming does deal

And Ukraine's UkrlandFarming sold $275 million 10 7/8% notes due March 26, 2018 at par to yield 10 7/8%, a market source said.

The notes priced in line with initial guidance, set in the high-10% area.

Citigroup, Deutsche Bank and Sberbank CIB were the bookrunners for the Rule 144A and Regulation S deal.

UkrLandFarming is an integrated agricultural producer based in Nicosia, Cyprus but focused on the Ukraine.

Star Energy prices bonds

Indonesia's Star Energy priced a $350 million issue of 6 1/8% notes due March 27, 2020 at par to yield 6 1/8%, a market source said.

Barclays and DBS Bank were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund the repurchase or redemption and cancellation of the company's 2015 notes in a concurrent tender offer.

Star Energy is a West Java-based geothermal power station operator.

New Indonesian bonds

Indonesia's Bank Rakyat sold $500 million 2.95% notes due March 28, 2018 at 99.196 to yield 3 1/8%, a market source said.

Citigroup and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The proceeds will be used for general corporate purposes.

Indonesia's Alam Sutera Realty printed a $235 million issue of 6.95% notes due March 27, 2020 at 98.376 to yield 7¼%, a market source said.

Morgan Stanley and UBS were the bookrunners for the Rule 144A and Regulation S deal.

Calidda launches

Peru's Gas Natural de Lima y Callao SA (Calidda) launched a $320 million issue of 10-year notes with a 4 3/8% yield, a market source said.

The notes were initially talked at a yield in the high-4% area.

Citigroup and Santander were the bookrunners for the Rule 144A and Regulation S deal.

Calidda is a gas producer based in Lima, Peru.

Banco ABC Brasil sets talk

Banco ABC Brasil set price talk at the mid- to high-8% area for a three-year issue of real-denominated notes, a market source said.

Banco Bradesco, HSBC and Itau BBA are the bookrunners for the deal.

The notes will be payable in dollars.

Banco ABC Brasil is a lender based in Sao Paulo.

AES El Salvador talks notes

Panama-based AES El Salvador Trust II is planning a $310 million issue of 10-year notes at a yield of 7% to 7 1/8%, a market source said.

Barclays and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

The notes are guaranteed by Compania de Alumbrado Electrico de San Salvador, SA de CV, AES Clesa y Compania, S en C de CV, Empresa Electrica de Oriente, SA de CV and Distribuidora Electrica de Usulutan, SA de CV, each a company organized in El Salvador with limited liability.

Koc picks leads

Turkey-based conglomerate Koc Holding AS has mandated BofA Merrill Lynch, BNP Paribas, Citigroup and Deutsche Bank for an issue of up to $1 billion in notes, a market source said.

China-based property developer Yuexiu Property Co. Ltd. has mandated Bank of China, DBS Bank, HSBC and Morgan Stanley for a roadshow starting Friday, a market source said.

A Regulation S-registered issue of dollar notes is expected to follow the marketing trip in Singapore, Hong Kong and London.

Filinvest, China Minmetals ahead

Manila-based homebuilder Filinvest Land Inc. set talk at 4¼% for a dollar-denominated issue of senior notes, a market source said.

UBS and HSBC are the bookrunners for the Regulation S deal.

And China Minmetals Corp. has given price guidance of 3.65% to 3¾% for its renminbi-denominated issue of three-year notes, a market source said.

HSBC, DBS Bank, ICBC (Asia), ABC International and Standard Chartered Bank are the bookrunners for the Regulation S deal.

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