Sinopec, Damac, YPF, Siam, Avic do deals; Turkey bonds 'robust'; Asian bonds move higher

By Christine Van Dusen

Atlanta, April 2 - The second day of the new month started with a flurry of new issuance from such emerging markets names as China Petrochemical & Chemical Corp. (Sinopec Group), Dubai's Damac Real Estate Development Ltd., Argentina's Yacimientos Petroliferos Fiscales (YPF) and Thailand's Siam Commercial Bank Ltd.

Also printing notes on Wednesday were China's AVIC International Holdings Ltd. and Singapore's Vibrant Group.

Meanwhile, the secondary market remained strong - for the time being.

"Yesterday saw good tightening as investors were emboldened by the general lack of bad headlines, light Street positioning and excess cash being put to work," a London-based analyst said. "EM remains strong, but the impression this morning is that the rally is slowly stalling after recent strong sessions."

Russian corporate and bank bonds weakened slightly on Wednesday morning.

"Not surprising, given that they have tightened significantly in the last couple of days," she said. "Tensions in the Ukraine region appear to be slowly dissipating, with Putin reportedly ordering some troops away from the border."

Bonds from Turkey remained "robust" on Wednesday morning, with spreads slightly tighter, she said.

"While the election result has been taken positively by the market, we expect concerns about future unrest may begin to play on investors' minds going forward," she said.

Risk assets from Asia were "broadly higher" on Wednesday, according to a report from Barclays.

"The rally in risk assets has withstood a generally lackluster round of global manufacturing PMI data," the report said. "Asset prices most linked to global growth are already relatively cheap."

And investors "believe some of the recent weakness in growth is temporary and, either way, the weakness in growth is likely to provide an opportunity for more policy stimulus, especially in China," the report said.

Slovenia notes perform

In trading on Wednesday, Slovenia's new two-tranche issue of €2 billion notes due 2017 and 2021 performed well in trading, a trader said.

The deal included €1 billion 1¾% notes due in 2017 that priced at mid-swaps plus 115 basis points and €1 billion 3% notes due 2021 that priced at 173 bps.

"The seven-year is trading up 1 point and the three-year is up a ½ point," the trader said.

Barclays, Commerzbank, HSBC, Societe Generale and Unicredit were the bookrunners for the Regulation S deal.

SECO stumbles

But Saudi Electricity Co.'s new dual-tranche notes were not trading as well - the 10-year was just a touch above reoffer while the 30-year saw few sellers, the trader said.

The issuer priced $2.5 billion notes due 2024 and 2044 in a Rule 144A and Regulation S transaction with Deutsche Bank, HSBC and JPMorgan.

The deal included $1.5 billion 4% notes due 2024 that priced at par to yield 4%. The notes were talked at a yield in the 4 1/8% area.

The second tranche of $1 billion 5½% notes due 2044 priced at par to yield 5½%. The notes were talked at a yield of 5½% to 5 5/8%.

Sinopec prices notes

In its new deal, China's Sinopec priced a five-tranche issue of $5 billion fixed- and floating-rate notes due in three, five and 10 years (expected ratings: Aa3/A+/), a market source said.

The deal included $1.25 billion 1¾% fixed-rate notes due 2017 that priced at 99.773 to yield Treasuries plus 90 bps.

The second tranche of $1.5 billion floating-rate notes due 2017 priced at par to yield Libor plus 78 bps.

The $750 million 2¾% fixed-rate notes due 2019 priced at 99.796 to yield Treasuries plus 100 bps.

The $500 million floating-rate notes due 2019 priced at par to yield Libor plus 92 bps.

And the $1 billion 4 3/8% notes due 2024 priced at 99.767 to yield Treasuries plus 160 bps.

Citigroup, Bank of China International, Morgan Stanley, United Overseas Bank, Scotiabank, Commonwealth Bank of Australia, Societe Generale, RBS and China Merchants Securities were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for refinancing existing indebtedness and for general corporate purposes.

The notes were issued by Sinopec Group Overseas Development (2014) Ltd.

Vibrant sells bonds

Singapore's Vibrant Group priced S$100 million 7.35% perpetual notes at par to yield 7.35%, a market source said.

DBS was the bookrunner for the Regulation S notes.

Formerly known as Freight Links Express Holdings Ltd., Vibrant is a logistics, real estate and financial services group based in Singapore.

New deal from Damac

Dubai's Damac sold $650 million 4.97% notes due 2019 at par to yield 4.97%, according to a company announcement.

Barclays, Citigroup and Deutsche Bank were the joint global coordinators. The three banks - along with Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital and National Bank of Abu Dhabi - were also joint lead managers for the Regulation S deal.

The issuer is a luxury property development company based in Dubai.

YPF prints notes

In its new deal, Argentina-based petroleum and natural gas company YPF priced $1 billion 8¾% notes due in 2024 at par to yield 8¾%, a market source said.

HSBC, Itau BBA and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for investments in fixed assets and working capital.

Issuance from Siam

Thailand's Siam Commercial Bank sold $750 million 3½% notes due 2019 at 99.60 to yield Treasuries plus 180 bps, a market source said.

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

AVIC issues

China's AVIC International, through AVIC International Finance & Investment Ltd., sold RMB 1.5 billion 4.8% notes due 2017 at 99.862 to yield 4.85%, a market source said.

Bank of China International, Morgan Stanley and Wing Lung Bank were the bookrunners for the Regulation S deal.

AVIC International, formerly Catic Shenzhen Holdings Ltd., is a Hong Kong-based investment holding company. It is the non-aeronautical branch of Aviation Industry Corp. of China and has businesses in high-tech manufacturing, real estate development, property management, hotel management, retail, import and export trade and resources development.

Sura sets roadshow

Colombia's Sura Asset Management will set out on Friday for a roadshow to market a possible issue of notes, a market source said.

BofA Merrill Lynch and Morgan Stanley are the bookrunners for the Rule 144A and Regulation S marketing trip.

The roadshow will begin on Friday in London, Zurich and Geneva and then travel to New York, Santiago, Boston and Lima before concluding on April 9 in Los Angeles and Chicago.

Sura is a pension fund administrator in Latin America, with main operations in Chile, Mexico, Peru and Colombia.

Costa Rica attracts orders

The final book for Costa Rica's new $1 billion 7% notes due 2044 that priced at par to Treasuries plus 339.5 bps was $4.6 billion, a market source said.

The notes were talked at a yield in the low-7% area.

BofA Merrill Lynch and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S transaction.

The proceeds will be used to refinance debt.

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