Primary market to host Ecopetrol; Russia strengthens; Serbia weakens; buyers for Dubai

By Christine Van Dusen

Atlanta, May 20 - Colombia's Ecopetrol launched an issue on a solid Tuesday for emerging markets bonds, even as Ukraine's presidential election approached and Russian troops did not appear to be moving from the border.

"Market participants brushed away headline news," according to a report from Erste Group Research.

Bonds from Russia strengthened, with many bank issues tightening between 8 basis points and 14 bps, a London-based analyst said.

"In Turkey, sovereign cash is generally 4 bps to 5 bps tighter," she said. "This follows better sellers of the long end last week, as investors appear to be rotating back into Russia. The Turkey 2041-versus-Russia-2042 spread is now flat."

Serbia saw its 2021 dollar bonds weaken up to one point in price or 15 bps in yield, Erste Group said.

"Nevertheless, the correction comes during nearly record-low yield levels for the issuer across the curve," the report said.

The secondary market on Tuesday also saw Lebanon continue to "tick along very nicely," a London-based trader said. "The long-dated 2026s and 2027s are now at 101½ on the bid side, 7 bps tighter on the week."

Buyers were spotted for Dubai's 2020s, 2022s, 2023s, all of which were between 5 bps and 7 bps tighter, he said.

"We witnessed fresh high levels on the belly of the Dubai government curve," he said. "Impressive effort."

Dar Al-Arkan Holdings saw two-way action for its 5¾% 2016 notes.

"Retail sellers now," he said.

America Movil widens

From Latin America, Mexico's America Movil SAB de CV was in focus as the telecommunications company said it would not be able to acquire a significant piece of AT&T Inc.'s $5.76 billion stake, a New York-based trader said.

"We saw their bonds widen yesterday on the long end 4 bps to 5 bps, the belly maybe a few," he said. "It seemed to have drawn out a few real-money sellers as well."

Ecopetrol launches notes

Colombia's Ecopetrol launched a $2 billion issue of notes due May 28, 2045 at Treasuries plus 255 bps, a market source said.

The notes were talked at a spread in the 275 bps area.

Deutsche Bank and Goldman Sachs are the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general corporate purposes.

Ecopetrol is a Bogota, Colombia-based petroleum company.

ICA talks notes

Mexico's Empresas ICA SAB de CV set initial talk in the mid-9% area for its upcoming issue of dollar-denominated and benchmark-sized notes due in 10 years, a market source said.

Barclays, Credit Suisse, Deutsche Bank, Morgan Stanley are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay certain indebtedness and fund a tender offer.

The notes could price as soon as Wednesday.

ICA is a Mexico City-based construction company.

Abu Dhabi lender sets talk

Abu Dhabi Commercial Bank PJSC set talk in the mid-swaps plus 165 bps area for its five-year issue of Australian dollar-denominated notes, a market source said.

ANZ, Deutsche Bank and Nomura Securities are the bookrunners for the deal.

And Buenos Aires set talk at 12% for an upcoming issue of notes, a market source said.

The bonds are expected to price in the next 10 days, the source said.

Other details were not immediately available on Tuesday.

Guidance from Saudi corporate

Saudi Arabia's Dar Al-Arkan Real Estate Development Co. set initial price talk in the high-6% area for its upcoming issue of dollar-denominated Islamic bonds due in five years, a market source said.

Bank Alkhair, Deutsche Bank, Emirates NBD Capital and Goldman Sachs are the global coordinators and joint bookrunners. Al Hilal Bank, Barwa Bank, Al Rayan Investments and Qinvest are joint bookrunners for the Regulation S deal.

The notes are expected to price this week.

Davivienda seeks issuance

Colombia's Banco Davivienda SA is looking to issue $180 million of notes during the second half of this year, a market source said.

No other details were immediately available on Tuesday.

Davivienda is a lender based in Bogota, Colombia.

China bank deal draws orders

China Construction Bank Corp.'s new RMB 1.5 billion 3.38% notes due 2016 drew a final book of more than RMB 4.3 billion from 100 accounts, a market source said.

The notes came to the market at par to yield 3.38% via CCB International, Commerzbank, BNP Paribas and Standard Chartered Bank in a Regulation S deal.

The issuer is based in Beijing.

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