Trading volumes rise; Ukraine bonds widen; Qatar sees sellers; more activity for Lat-Am

By Christine Van Dusen

Atlanta, Dec. 2 - Trading volumes picked up on Monday after the previous week's Thanksgiving-related lull, with bonds from Ukraine widening and sellers emerging for Latin American bonds as the primary market took a breather.

"The pipeline appears to be fading as we go into December, although Uranium One has begun investor meetings for a potential dollar secured deal," a London-based trader said. "Spreads, for the most part, are behaving themselves. However, liquidity is very testing. Flows are steady for a Monday."

Bonds from Bahrain and Dubai took a pause after the previous week's solid performance, driven for the latter by the sovereign's designation as host for Expo 2020, he said.

"Of course, the good news regarding this event is offset by some expected funding requirements," he said.

Sellers were spotted for the long end of Qatar, he said.

"It really does feel like we are in December now," the London trader said. "I'm expecting a few sessions of liquidity every week until about Dec. 18 or 19."

Taking a closer look at Ukraine, the sovereign's paper moved as much as 75 basis points wider on Monday as a result of protests against the government's decision to not sign a trade agreement with Europe, a London-based analyst said.

"The rest of the market is opening relatively unchanged in spread terms, although Russian telecoms are a little wider while Turkish banks are holding up well," she said.

Only a few issuers took steps toward pricing new deals, including Altice Financing SA and Altice Finco SA, Mexico's Grupo Idesa SA de CV and China Merchants Land Ltd.

Healthy volumes

Volumes for Latin America bonds were healthy in trading on Monday, a New York-based trader said.

Better selling was seen amid weakness in U.S. Treasuries, with bonds from Venezuela and PDVSA hitting new lows, he said.

The sovereign's 2027s were quoted down at 72¾ while PDVSA's 2017s dipped to 781/2.

Sellers for Lat-Am corporates

For Latin American corporates, selling was strong throughout the session, another New York trader said.

Bonds from Brazil's Petrobras International Finance Co. (Petrobras) moved 7 bps to 10 bps wider on headlines about gas and diesel price increases, he said.

"High-grade credits were either flat on the day or lower," he said. "Overall they felt a little heavy with the consistent retail-money selling, which seemed to be taken in by dealers in a fairly orderly manner."

Yapi Kredi holds steady

The recent issue of 5¼% notes due in five years that Turkey's Yapi ve Kredi Bankasi AS priced at 99.342 was mostly unchanged in trading on Monday, a trader said.

The notes came to the market at a spread of 395 bps spread over mid-swaps with BofA Merrill Lynch, BNP Paribas, Citigroup Global Markets, HSBC and UniCredit.

"We've had a decent tick over on the supply front and suspect the market is trying to second-guess who are the next likely candidates to tap the market," he said.

Aldar trades up

The recent issue of notes from United Arab Emirates-based Aldar Properties PJSC - $750 million 4.348% notes due Dec. 3, 2018 that priced at par - traded Monday at 101.20 bid, 101.70 offered, a trader said.

The notes came to the market at mid-swaps plus 290 bps via bookrunners Standard Chartered Bank, Dubai Islamic Bank, First Gulf Bank, Goldman Sachs and National Bank of Abu Dhabi in a Regulation S deal.

"Performing very well, circa 35 bps tighter after a competitor recommendation," she said.

Oredoo seen near reoffer

Qatar's Ooredoo QSC saw its new issue of 3.039% notes due Dec. 3, 2018 that priced at par trade on Monday at par bid, 100.10 offered, a trader said.

The notes priced at a spread of mid-swaps plus 160 bps with DBS Bank, Deutsche Bank, HSBC, QInvest and QNB Capital in a Regulation S deal.

"We expected the deal to stir interest, given the lack of non-bank sukuk paper from Qatar and the company's A2/A/A+ rating," she said. "The bond has tightened circa 5 bps since issuance."

The notes' performance should improve over time, a trader said, especially compared to the company's 2016s and 2019s.

Altice on roadshow

Luxembourg-based Altice, which operates Hot Mobile, a wireless telecommunications company in Israel, was on a roadshow to market a two-tranche issue of dollar notes due in eight and 10 years, a market source said.

The $1.29 billion tranche due in eight years comes with three years of call protection. The $400 million 10-year notes carry five years of call protection.

Goldman Sachs and Morgan Stanley are the global coordinators. Barclays, Credit Agricole CIB and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow began on Monday in London and continues in the United States on Tuesday.

Marketing trip for Idesa

Mexico-based petrochemical company Grupo Idesa will set out on Wednesday for a roadshow to market a possible issue of notes, a market source said.

Morgan Stanley, HSBC and Scotiabank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will begin in London and travel to New York and Los Angeles before concluding on Friday in Boston.

China Merchants plans deal

Hong Kong-based real estate and property developer China Merchants Land is looking to sell credit-enhanced bonds in a Regulation S transaction, according to a company filing.

ICBC Asia, BofA Merrill Lynch, DBS Bank, Barclays, CCB International Capital, China Merchants Securities, ING Bank, JPMorgan and UBS are the bookrunners for the deal.

The proceeds will be used for general corporate purposes.

PTA Bank sells bonds

On Friday, Eastern and Southern African Trade and Development Bank (PTA Bank) sold $300 million 6 3/8% notes due Dec. 6, 2018 at par to yield 6 3/8%, or mid-swaps plus 490.5 bps, a market source said.

The notes were talked at a yield in the 6½% area.

BNP Paribas and Standard Chartered Bank were the bookrunners for the Regulation S deal.

PTA Bank is a lender based in Bujumbura, Burundi.

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