Deals from Mexico, ADBC, BOC, China Electronics, Slovakia; buyers for Middle Eastern bonds

By Christine Van Dusen

Atlanta, Jan. 9 - Mexico, Agricultural Development Bank of China, Bank of China Ltd., China Electronics Corp. Holdings Co. Ltd. and Slovakia were among the issuers to print new deals on Thursday as some spreads widened and buyers emerged for Abu Dhabi Commercial Bank and Qatar's long-dated bonds.

"Another fairly active session as we pretty much round out the first full trading week of the year," a London-based trader said. "The market players have cash and need to hit yield targets. They also have a huge amount of cash returning to them this year in the form of redemptions."

The Markit iTraxx SovX index spread was at Treasuries plus 218 basis points over Treasuries, wider by 3 bps from Wednesday. The corporate index was flat at 253 bps over Treasuries.

"The market feels quieter this morning than previous days, with Turkey weaker," a London-based analyst said. "Sovereign cash is 8 bps to 9 bps wider."

This came amid some positive news for the sovereign, which saw October industrial production rise 4.6%, year-over-year, according to a report from Commerzbank Research.

Capital goods were also strong during the month.

"December could suffer a hit from the widely discounted political chaos, but by January and February this effect is likely to taper off, irrespective of the political fallout," the report said.

In other trading on Thursday, bonds from the Middle East and North Africa seemed well supported, the analyst said, due to the lack of issuance from the region.

"Asia continues to see supply hit the market. Next week should be Middle East and North Africa's turn," a trader said.

Investors like Qatar

Long-end Qatar bonds saw buyers, as did Dubai Holding's 2017s and Emirates airline and Saudi Electricity Co., another trader said.

"Great start to 2014 for DP World, with both bonds the best part of 30 bps tighter," he said. "Active week."

Aldar to get a boost

Also from the Middle East, Aldar Properties PJSC's 2014 2% dollar notes could be an "OK place to park for four months," he said. "Aldar's 2019s will get a boost once this one is paid down."

Buyers were also seen for Abu Dhabi Commercial Bank's 2023s late in the day, he said.

"Perpetuals were a little quiet today," He said. "Kuwati names still popular, but again, on the offer side liquidity is a little testing."

Lat-Am volumes strong

Volumes were again strong for corporate bonds from Latin America, a New York-based trader said.

"Clients are still active but not hugely, as we see some clients selling and others getting out of credits and back into others, doing switches," he said.

Brazil's Petroleo Brasileiro SA (Petrobras) saw its 2023s widen, he said.

"The market, overall, still remains fairly constructive," he said. "Most credits trade on their own merit."

Poland in focus

Poland remained in focus on Thursday, following Wednesday's pricing of a €2 billion issue of 3% notes due 2024 at 99.727 to yield mid-swaps plus 87 bps, a market source said.

BNP Paribas, Citigroup, Societe Generale and Unicredit were the bookrunners for the Regulation S deal.

"Trading up 1/8th of a point this morning," a trader said on Thursday.

The sovereign is expected to price another issue "in the near future," according to a report from Commerzbank Research.

"The government plans to complete its entire issuance plan of about €3.3 billion, net, within the first quarter," the report said.

Ukraine sees profit-taking

Short-dated bonds from Ukraine have seen "mild profit-taking" so far this week, said Svitlana Rusakova of Dragon Capital.

The 2014s and 2015s have been trading above par.

"Slightly better offers at the long end," she said.

The 2016s and 2017s have seen 1/2-point gains.

"Quasi-sovereigns were also in good shape," she said, noting that the State Administration of Railways Transport of Ukraine's (Ukrzaliznytsia) 2018s were spotted at 941/2.

Mexico prices bonds

In its new deal, Mexico priced a two-tranche issue of $2.5 billion notes due 2021 and 2045 in a Securities and Exchange Commission-registered deal, a market source said.

The deal included $1 billion 3½% notes due 2021 that priced at 99.343 to yield Treasuries plus 120 bps. The notes were talked at a spread in the 125 bps area.

The $1.5 billion 5.55% notes due 2045 priced at 99.472 to yield Treasuries plus 170 bps. They were talked at a spread in the Treasuries plus 175 bps area.

Credit Suisse and HSBC were the joint lead managers for the offering.

New notes from ADBC

In its new transaction, Agricultural Development Bank of China priced a two-tranche issue of note due 2016 and 2017 in a Regulation S deal, a market source said.

The deal included RMB 2 billion 3.08% notes due 2016 that priced at par and RMB 1 billion 3.28% notes that priced at par.

Bank of China, Standard Chartered Bank, Bank of Communications (Hong Kong), CCB International and ICBC Asia were the bookrunners for the transaction.

Bank of China does deal

Bank of China priced RMB 2.5 billion 3.45% notes due 2017 (A1/A/) at par to yield 3.45%, a market source said.

BofA Merrill Lynch, HSBC and UBS were the bookrunners for the Regulation S deal.

The proceeds will be used for general corporate purposes.

China Electronics issues bonds

China Electronics Corp. Holdings Co. Ltd. priced RMB 2.75 billion 4.7% notes due 2017 at par to yield 4.7%, a syndicate source said.

The notes were talked at a yield of 4.7% to 4.8%.

BNP Paribas and BOC International were the bookrunners for the Regulation S deal.

Proceeds will be used for working capital and general corporate purposes.

China Electronics is a state-owned IT conglomerate based in Beijing.

Slovakia sells notes

Slovakia priced a €1.5 billion issue of 3 5/8% notes due 2029 (A2/A/A+) at 99.658 to yield 3.655%, or mid-swaps plus 105 bps, a market source said.

The notes were talked at a spread in the 110 bps area.

Natixis, Erste Group and Unicredit were the bookrunners for the Regulation S deal.

Philippines launches issue

The Philippines launched a $1.5 billion issue of 10-year notes at 4.2%, a market source said.

Deutsche Bank, HSBC and Standard Chartered Bank are the joint lead managers for the Securities and Exchange Commission-registered transaction.

The joint lead managers and bookrunners are ANZ Securities, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley and Standard Chartered Bank.

The proceeds will be used to fund a tender offer and for expenses incurred in that transaction, as well as for general governmental purposes.

IFC taps banks

China's IFC Development (Corporate Treasury) Ltd. has mandated BNP Paribas, Credit Agricole, HSBC, Mizuho Securities and Morgan Stanley to arrange a roadshow in Europe, a market source said.

No other details were immediately available on Thursday.

IFC is a Hong Kong-based owner and operator of mixed-use complexes.

Chinese corporates issuance

On Wednesday, China's Wuzhou International Holdings Ltd. priced a $100 million increase of its 13¾% senior notes due 2018 at par to yield 13¾% via UBS, according to a company filing.

The proceeds will be used for investments in existing and new real estate projects and for general corporate purposes.

The company priced $100 million of the notes on Sept. 26 at 99.122 to yield 14%.

Also on Wednesday, China's Peking University Founder Group Co. Ltd. priced RMB 1.2 billion 5 7/8% notes due 2017 at par to yield 5 7/8%, a market source said.

DBS Bank is the sole bookrunner for the Regulation S notes.

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