Malaysia, Morocco’s OCP sell notes; oil companies get boost; investors digest Asian issues

By Christine Van Dusen

Atlanta, April 15 – Malaysia and Morocco’s Office Cherifien de Phosphate (OCP) sold notes during a good session for energy companies and a slightly weaker day for Asian bonds.

“Good day for oil, highlighted by the tightening in Russia and oil-related credits, versus the weakness South Africa and Turkey,” a London-based trader said.

Asian bonds were somewhat softer on Wednesday as investors digested new issues and awaited more, a trader said.

“High-grade cash closed the day 1 basis point to 3 basis points wider, with selective underperformers,” he said, pointing to China-based Tencent Holdings Ltd.’s 2025s.

Notes from Korea were firm on Wednesday while India’s paper was mixed, with corporates tightening slightly and financials softening, he said.

“Philippines’ curve held in unchanged, but 1 bp to 2 bps wider on spread as U.S. Treasuries rallied,” he said. “The Indonesia curve was heavy throughout the day, with real-money accounts trimming exposure. The curve closed down a half-point, 2 bps to 5 bps wider on spread.”

From the Middle East, prices firmed up on the back of the move in rates, with Lebanon a particular standout, a London-based trader said.

“Perpetuals are balanced and maybe tired after a solid week,” he said, noting that more supply is on the horizon.

Demand was seen for Saudi Electricity Co. and DPWorld’s 2037s and 2017s as the session went on, he said.

“Two-way on Emirates’ 2016s,” he said. “Ras al Khaimah 2025 going out at 100 1/8 mid, wider and not keeping up with the rates move.”

Kuwait-based Kipco saw its 2019s continue to lag, moving 30 bps wider on the month.

Pacific Rubiales sees demand

In other trading, demand for Toronto-based and Colombia-focused Pacific Rubiales Energy Corp. remained strong on Wednesday, a New York-based trader said, with bonds moving up a point as oil prices hit $2.30 per barrel.

Sellers began to emerge later in the day, and most of the focus was on the company’s 2025s and 2019s, he said.

Meanwhile, sovereign bonds from Colombia ticked a touch lower and Colombia’s Ecopetrol SA underperformed its peers in the oil business.

Chinese corporate bond trades

The new issue of notes from Central China Real Estate Ltd. – $300 million 8¾% notes due January 2021 that priced Tuesday at par – traded during Wednesday’s Asian session at 100 1/8 bid, 100 3/8 offered, a trader said.

BNP Paribas, Deutsche Bank, Morgan Stanley and OCBC were the bookrunners for the Regulation S notes.

The proceeds will be used to repay existing debt and for general corporate purposes.

Haitong dips

China’s Haitong International Securities Co. Ltd. saw its new issue of $670 million 3½% notes due 2020 trade lower on Wednesday, a trader said.

The notes priced Tuesday at 98.8910 to yield 3.524%, or Treasuries plus 220 bps, at the tight end of talk.

Early Wednesday, the notes were spotted at 215 bps bid, 213 bps offered.

Haitong International, Standard Chartered Bank, BESI and CMBI were the bookrunners for the Regulation S deal.

The proceeds will be used to increase share capital and for other general corporate purposes.

“We saw accounts topping up at the break, and bonds traded at 212 bps, closing at 215 bps bid, 212 bps offered,” the trader said.

Formosa tightens

The new bonds from Taiwan’s Formosa Plastics Group moved early Wednesday to 149 bps bid, 147 bps offered after pricing at a spread of 157 bps over Treasuries, a trader said.

The notes were talked at a spread in the 160 bps area.

Bank of China, HSBC, ANZ and Mizuho Securities were the bookrunners for the Regulation S deal.

“Bonds traded to tights of 147 bps as accounts topped up poor allocations,” a trader said. “But profit-takers quickly sold into the rally. London opened with mostly profit takers, and we closed at 153 bps bid, 150 bps offered, tighter by 6 bps.”

In deal-related news, market sources were whispering about a possible issue of notes from United Arab Bank.

Malaysia sells notes

In its new deal, Malaysia priced a $1.5 billion two-tranche issue of Islamic bonds due in April 22 of 2025 and 2045, a syndicate source said.

The deal included $1 billion 3.043% notes due 2025 that priced at par to yield 3.043%, or Treasuries plus 115 bps. The notes priced tighter than talk, set at 135 bps.

The $500 million 4.236% notes due 2045 priced at par to yield 4.236%, or Treasuries plus 170 bps. Talk was set at 185 bps.

CIMB, HSBC and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

OCP prices issue

Morocco’s OCP priced a $1 billion issue of 4½% notes due Oct. 22, 2025 at 98.765 to yield 4.65%, a syndicate source said.

The notes were talked at a yield in the 4¾% area.

Barclays and Morgan Stanley were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to fund the company’s expenditure program and for general corporate purposes.

OCP is a phosphate exporter based in Casablanca.

Isbank unit launches bonds

Turkey’s Turkiye Sinai Kalkinma Bankasi AS (TSKB) launched a $350 million issue of five-year notes at a spread of 375 bps over mid-swaps, a market source said.

BNP Paribas, Citigroup, Commerzbank, ING and Standard Chartered Bank are the bookrunners for the deal.

The issuer is a subsidiary of Istanbul-based Turkiye Is Bankasi AS (Isbank).

CCC releases final book

The final book for China Communications Construction Co. Ltd.’s new $1.1 billion issue of 3½% perpetual notes that priced at par was more than $8 billion from 342 accounts, a market source said.

The notes were talked at 3½%.

UBS, HSBC and Morgan Stanley were the bookrunners for the Regulation S deal.

The proceeds will be used for working capital and for general corporate purposes outside China.

© 2015 Prospect News.
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