Wheelock sells bonds; questions emerge about Honduras deal; Emirates airline sets talk

By Christine Van Dusen

Atlanta, March 11 - China's Wheelock & Co. sold notes on a Monday that saw thin volumes and some questions about the planned issue of notes from Honduras, which market sources say could face some hurdles now that a bookrunner has backed out.

Barclays stepped away from the sovereign's planned issue of amortizing dollar-denominated notes due in March 2024 following news of a lawsuit against Honduras that wasn't mentioned in the original prospectus for the Rule 144A and Regulation S deal.

Market sources were unsure whether this would delay the transaction.

In other deal-related news, Dubai's Emirates airline set price talk; Emirates NBD PJSC and Russia's Vnesheconombank (VEB) mandated bookrunners; and Kenya and Turkey's Turkiye Is Bankasi AS (Isbank) planned deals.

And integrated vegetable processor China Minzhong Food Corp. Ltd. delayed a roadshow for a planned issue of dollar-denominated notes following an acquisition, a market source said.

JPMorgan and Deutsche Bank are the bookrunners for the deal.

Meanwhile, the Markit iTraxx SovX index spread started Monday unchanged at Treasuries plus 170 basis points while the corporate index narrowed 1 bp to 215 bps over Treasuries.

"No major moves on spreads, although it's still a thin, technical market on many names," a London-based trader said. "The usual suspects were active."

The perpetual notes from Abu Dhabi Islamic Bank that recently priced at par were trading Monday between 104.20 and 104.60.

Retail investor action was also noted for Emirates airline's 2016s and 2025s.

"Some Qtel paper definitely has come out in the past few sessions, with the 2023s and 2028s trending lower," he said. "It makes sense, as they look optically rich versus the 2021s and 2025s. But again there's a higher dollar price on older bonds."

Wheelock does deal

In its new deal, Hong Kong financial real estate company Wheelock priced $500 million 3% five-year notes at 99.371 to yield 3.137%, or Treasuries plus 225 bps, a market source said.

The notes priced at the tight end of talk, set at Treasuries plus 225 bps to 230 bps.

DBS, HSBC and Standard Chartered Bank were the bookrunners for the deal.

Emirates gives guidance

Dubai-based Emirates airline set initial price talk at mid-swaps plus the low-300 bps area for its dollar-denominated issue of benchmark-sized Islamic bonds, a market source said.

Citigroup, Standard Chartered Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank and Emirates NBD are the bookrunners for the Regulation S deal.

The deal is expected to price early this week.

Emirates NBD taps leads

Also from Dubai, financial services company Emirates NBD has mandated HSBC, National Bank of Abu Dhabi, Citigroup, JPMorgan, Societe Generale and Emirates NBD as bookrunners for a benchmark-sized issue of notes.

And Kenya is planning a dollar-denominated offering of notes during the second half of this year, a market source said.

No other details were immediately available on Monday.

VEB picks banks

In other news, Russia-based lender VEB has mandated BNP Paribas and UBS for a roadshow in Switzerland from March 18 to March 20, a market source said.

A Swiss franc-denominated offering of Regulation S notes is expected to follow.

And Turkey-based Isbank is planning a lira-denominated issue of notes via Barclays, Citigroup, Deutsche Bank, HSBC and JPMorgan, a market source said.

Qatar notes solid

In trading, bonds from the front end of Qatar's curve were rock-solid on Monday, a trader said, as the sovereign hopes to achieve an AAA rating.

"They will clearly need to diversify [the] economy even more away from hydrocarbons for this to occur," he said. "Granted, a budget surplus of 8½% helps."

"Some paper also came out today on ADCB's 2018 senior bond, which also looks rich, to my mind," the London trader said.

Africa in focus

Looking to Africa, bonds from South Africa's Sasol Ltd. were lower and wider on the news that the company wants to issue notes again soon.

The company last printed notes on Nov. 6, with a $1 billion issue of 4½% notes due 2022 that priced at 99.048, or Treasuries plus 287.5 bps.

The South Africa sovereign was about 10 bps better over the week.

Meanwhile, Zambia was unchanged on the month.

"They're still around this par to 100.50 level," a trader said.

Russian bonds strengthen

Bonds from Russia opened Monday a bit stronger, a London-based analyst said.

"Turkish corporates seem to be ignoring the bank fines announced on Friday," she said.

She was referring to the Turkish Competition board's recent investigation into unfair competitive prices in the Turkish banking industry, which led to a significant fine.

"It has been reported this morning that Garanti will appeal the decision, and it is expected that others will follow suit," she said.

Cosan notes oversubscribed

The recent two-tranche issue of notes due 2018 and 2023 from Brazil-based bioethanol and energy producer Cosan SA was oversubscribed, a market source said.

A total of $500 million 5% 10-year notes priced at 98.839 to yield of 5.15%, or Treasuries plus 315.7 bps.

The tranche drew $9 billion in orders.

The deal also included R$500 million 9½% five-year notes that priced at 99.513 to yield 9 5/8%.

Bradesco BBI, BTG Pactual, Itau BBA and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

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