Romania, Korea Finance among new issuers; spreads tighten again; Bahrain bonds rally

By Christine Van Dusen

Atlanta, Sept. 12 - Romania, Korea Finance Corp., Singapore's Housing and Development Board and Sri Lanka's National Savings Bank sold notes on a Thursday that saw tighter spreads and more sellers than buyers for emerging markets bonds.

"But the Street was steadily chasing paper," a London-based trader said. "Liquidity is still testing on bonds outside of the more liquid curves. Assuming further stability in rates, and assuming we can get through the Fed meeting next week, we can expect some more supply."

The Markit iTraxx SovX CEEME ex-EU index spread on Thursday opened at 225 basis points over Treasuries, tighter by 12 bps. The Markit iTraxx Crossover index spread - seen Wednesday at 393 bps - narrowed to 386 bps on Thursday.

"U.S. Treasuries rallied yesterday and this morning we are opening at 2.89% after the 10-year auction," a London-based analyst said. "Turkey and Russia are both performing well this morning, about 5 bps to 10 bps tighter in cash."

Looking to Latin America, corporate bonds opened a bit stronger on a price basis on Thursday, a New York-based trader said.

"Spreads are unchanged on most off-the-run, less-traded credits and tighter by 5 bps to 8 bps on the spread-based stuff," he said.

The new notes from Ecopetrol continued to tighten, with the 2043s and 2023s moving about 10 bps.

"Names that have been beaten down pretty good on the downtrade and had yet to see signs of life when this uptrade first took shape are starting to see some small buying and are ticking up," he said.

From the Middle East, Bahrain's bonds continued to rally, with the 2022s and 2023s moving another 5 bps tighter.

"Another solid session for the market, with certain bonds off to the races. Perpetuals are higher again and there's retail investor demand," the London trader said. "Busy day, all told, with good inquiry all session.

Abu Dhabi Commercial Bank's 2023s and Emirates Islamic Bank's 2023s were popular.

"We traded two-way on both," he said.

South African bonds perform

From Africa, most bonds from South Africa were performing on Thursday, a London-based trader said.

"Eskom Holdings is very popular today, and the recent 2025s are now up 4 points from issue," he said. "In fact, all of South Africa is trading pretty well."

Asian issuers sell notes

In its new deal, Seoul-based Korea Finance priced a CHF 250 million issue of 1 3/8% notes due 2018 at 100.019 via Credit Suisse and UBS.

And Singapore's Housing and Development Board priced S$1.45 billion 2.365% notes due 2018 at par to yield 2.365%, a market source said.

ANZ, BNP Paribas, CIMB, Deutsche Bank, DBS Securities, DMG Securities, HSBC, OCBC, Standard Chartered Bank and United Overseas Bank were the bookrunners for the Regulation S deal.

NSB prints bonds

Sri Lanka's National Savings Bank priced $750 million 8 7/8% notes due 2018 at par to yield 8 7/8%, a market source said.

Talk was set in the 9¼% area.

Barclays, Citigroup and HSBC were the bookrunners for the Rule 144A and Regulation S deal.

Romania prices notes

In another new deal, Romania priced a €1.5 billion issue of 4 5/8% notes due 2020 at 99.16 to yield 4.769%, or mid-swaps plus 295 bps, a market source said.

Citigroup, Deutsche Bank, HSBC and Societe Generale were the bookrunners for the Regulation S deal.

"Looks about 30 bps cheap to the curve," the analyst said. "The 2019s are pricing down 1 point in response."

Century Master deal ahead

China's Century Master Investment Co. Ltd. is planning to price a dollar-denominated issue of benchmark-sized notes due in five years at a spread in the area of Treasuries plus 325 bps.

BOC International, Credit Suisse, Standard Chartered Bank, ABC International and UBS are the bookrunners for the Regulation S-only deal.

The notes are guaranteed by China Orient Asset Management (International) Holding Ltd., a subsidiary of Hong Kong-based China Orient Asset Management Corp.

Kexim gives guidance

Also on Thursday, Export-Import Bank of Korea (Kexim) set talk for a two-tranche issue of dollar-denominated notes due in three and five years a market source said.

The dollar benchmark-sized three-year floating-rate notes were talked at a spread of Libor plus 85 basis points to 90 bps.

The dollar benchmark-sized five-year notes were talked at a spread in the Treasuries plus 130 bps area.

BofA Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and Mizuho Securities are the joint bookrunners and lead managers for the Securities and Exchange Commission-registered deal. Samsung Securities is a lead manager.

The proceeds will be used for general operations, including extending foreign currency loans and repayment of maturing debt and other obligations, according to a filing with the SEC.

Grupo R sets talk

Mexico-based drilling company Grupo R SA de CV gave initial guidance in the low- to mid-8% area for its upcoming issue of $950 million seven-year notes.

Credit Suisse, Citigroup, Deutsche Bank and Santander are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to repay debt relating to the company's ultra-deep water assets.

The deal is expected to price this week.

Wuzhou taps bookrunners

China-based real estate developer Wuzhou International Co. Ltd. has mandated BNP Paribas and UBS to arrange a non-deal roadshow in Singapore.

Thailand's Bangkok Bank PCL has mandated Morgan Stanley to arrange a roadshow starting Sept. 16, a market source said.

The roadshow will provide an investor update in Singapore, Hong Kong, Boston, New York and London.

And Thailand is looking to issue as much as $1.5 billion of notes in 2014 to fund infrastructure projects.

Russian bank picks leads

Russia's Home Credit and Finance Bank has mandated Citigroup, Sberbank and UBS as bookrunners for a possible issue of notes, a market source said.

No other details were immediately available on Thursday.

The lender is based in Moscow.

CIFI final book

The final book for China-based CIFI Holdings Group Co. Ltd.'s new $225 million add-on to its existing 12¼% notes due 2018 was more than $1 billion from 88 accounts, a market source said.

The deal priced at 104 via Citigroup, Deutsche Bank, Haitong International, HSBC and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Fund managers picked up 68%, private banks 20% and corporates 12%.

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