Greentown China sells bonds as Fed news tightens EM spreads; Oxley and other deals ahead

By Christine Van Dusen

Atlanta, Sept. 16 - Greentown China Holdings Ltd. priced notes on a Monday that saw emerging markets bond spreads move tighter on the news that Larry Summers is no longer a contender to succeed Federal Reserve Chairman Ben Bernanke.

"Spread moves are pretty solid," a trader said.

The Markit iTraxx SovX CEEME ex-EU index spread on Monday opened at 220 basis points over Treasuries, 9 bps narrower than Friday. The Markit iTraxx Crossover index spread - seen Friday at 395 bps - moved in to 377 bps on Monday.

"We also have the long-awaited Federal Open Market Committee meeting starting tomorrow, which may finally see the Fed begin to taper the quantitative easing program," a London-based analyst said.

Monday's sentiment was also impacted by the news that Syria could give up its chemical weapons by mid-2014.

"With Treasury yields declining, we expect more issuance than already announced this week," the analyst said. "This focus on the primary, however, should result in thin secondary markets."

Most bonds from Central and emerging Europe, the Middle East and Asia were trading tighter in response to the Treasury move, with sovereign and banking bonds from Turkey as much as 12 bps tighter.

Russia-based oil company OAO Rosneft was an outperformer from that country, with its 2022s tightening by 14 bps.

"The Gazprom mid-curve is also performing well," the analyst said.

Meanwhile, several issuers took steps toward pricing new deals, including Singapore's Oxley Holdings Ltd., Turkey's Coca-Cola Icecek AS, Industrial Bank of Korea, Ping An Insurance (Group) Co. of China, Ltd. and Indonesia's PT Apexindo Pratama Duta Tbk.

Lat-Am tightens early

In trading from Latin America, corporate bonds moved tighter on Monday morning, with Petrobras, Vale SA and Codelco all moving in about 15 bps in the 10- to 30-year part of their curves, a New York-based trader said.

"Petrobras comprises the bulk of street volume so far," he said. "Off-the-run, non-spread credits feel firmer but have not tightened like the spread credits have. In fact, some have not tightened at all.

Odebrecht's 2022s, for example, moved about 4 bps wider.

"Clients across various account bases are generally quiet but are clearly on the buy side, after taking somewhat of a 'buy breather' on Friday," he said. "Will be interesting to see how far we can push this up, especially after another week of outflows last week."

Gains erode

By day's end, Latin America's corporate bonds lost some gains, the New York trader said.

"Prices were up only a little," he said. "A few non-spread, high-grade credits managed to eke out small gains, but many were unchanged on the day."

Still, the tone was positive for most of the session, he said.

Middle East in focus

Looking to the Middle East, DP World's 2037 notes moved back to par in trading, a London-based trader said.

Abu Dhabi Commercial Bank's 4½% 2023s were spotted at 93½ bid, 94½ offered while the 3 1/8% due 2023 traded at 90.37 bid, 91.37 offered, he said.

"ADCB 2023s have bounced back nicely," he said.

Bahrain's 2023s, which had hit a low of 96, traded Monday at par.

"Some of the moves probably caught a few off-guard, which is no real surprise," the London trader said. "Saudi Electricity Co.'s 2043s reached 90 and DPWorld also traded above par again."

Greentown China does deal

In its new deal, property developer Greentown China Holdings priced a $300 million issue of 8% notes due 2019 at par to yield 8%, a market source said.

Deutsche Bank, HSBC, Goldman Sachs, BOC International, ICBC (Asia), Standard Chartered Bank and UBS were the joint lead managers and joint bookrunners for the Regulation S deal.

The proceeds will be used to refinance short-term debt, to fund capital expenditures and for general corporate purposes.

SK Chemicals oversubscribed

The final book for Korea-based SK Chemicals Co. Ltd.'s new RMB 950 million 4 1/8% notes due 2016 was RMB 2 billion from more than 57 orders, a market source said.

The notes priced at par to yield 4 1/8% via BOC Hong Kong and HSBC in a Regulation S deal.

About 98% of the orders came from Asia and 2% from Europe, with 85% from fund and asset managers, 12% from banks and 3% from private banks.

Oxley talks notes

Singapore-based property developer Oxley Holdings gave initial price guidance in the 4¾% area for its upcoming issue of Singapore dollar-denominated two-year notes, a market source said.

DBS is the bookrunner for the deal.

Roadshow ahead for Icecek

Istanbul-based bottler Coca-Cola Icecek mandated Barclays, Citigroup, HSBC and JPMorgan to arrange a roadshow starting Wednesday, a market source said.

A Rule 144A and Regulation S issue of dollar-denominated and benchmark-sized notes is expected to follow.

In July the company mandated Barclays, Citigroup, HSBC and JPMorgan for a dollar deal that did not materialize.

The proceeds were to be used for debt refinancing.

Korean bank taps leads

Industrial Bank of Korea has mandated banks to arrange roadshows in Europe and the United States starting Sept. 23, a market source said.

The Seoul-based lender has tapped Barclays and Societe Generale to lead meetings in Europe. Goldman Sachs and HSBC will lead meetings in the United States.

An issue of notes may follow, subject to market conditions.

Ping An plans roadshow

Shenzhen-based holding company Ping An Insurance has mandated BofA Merrill Lynch and HSBC as bookrunners for a roadshow to market dollar-denominated notes, a market source said.

The roadshow will begin Tuesday and take place in Hong Kong and Singapore.

Apexindo picks banks

Indonesian oil, gas and geothermal drilling services provider Apexindo has mandated JPMorgan, Standard Chartered Bank, ANZ Banking Group and Raiffeisen Bank International to lead a roadshow for a five-year and dollar-denominated issue of notes.

The Rule 144A and Regulation S deal will be marketed in Asia, Europe and the United States starting on Tuesday.

NSB final book

The final book for Sri Lanka-based National Savings Bank's recent $750 million 8 7/8% notes due 2018 was $2.3 billion from 175 accounts, a market source said.

The notes priced at par to yield 8 7/8% with bookrunners Barclays, Citigroup and HSBC in a Rule 144A and Regulation S deal.

Marfrig prints bonds

On Friday, Brazil-based food processor Marfrig Alimentos SA priced $400 million 11¼% notes due 2021 at 98.715, a market source said.

The notes were talked in the mid-11% area.

BTG Pactual, Bradesco BBI and Credit Suisse were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund the tender offer for the company's 9 5/8% notes due 2016.

Marfrig previously announced an offer to purchase for cash any and all of the outstanding 2016 notes.

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