'Flying start' for perpetuals, long-dated EM notes; Yingde Gases, Sekerbank, Tata ahead

By Christine Van Dusen

Atlanta, April 2 - Emerging markets assets on Tuesday put in a busy trading session, with perpetual issues and long-dated assets the belles of the ball as most markets reopened following the Easter holiday.

"The month of April is off to a flying start," a London-based trader said. "Good interest all session."

Dubai Islamic Bank's recent perpetual notes closed Tuesday with a 102 handle after pricing in March at par. And Abu Dhabi Islamic Bank's perpetuals were only a point off their all-time high.

"The recent Abu Dhabi Commercial Bank 2023s and Emirates NBD 2023s are doing well with better buyers around," a London-based analyst said.

Emirates NBD remained well bid on Tuesday, closing at 100¼ bid, 100½ offered after last week's level of 99 3/8.

The 2026 notes from Abu Dhabi National Energy Co. (TAQA) and the 2043 notes from Dubai - as well as the 2043s from Saudi Electric Co. (SECO) and Qtel International - saw some demand in trading.

"This morning they were struggling, spread-wise, with the Cyprus- and North Korea-inspired bite to U.S. Treasuries," the trader said.

Investors and issuers remain anxious about the financial problems in Cyprus and the political tension originating in North Korea, and spreads remained wide, with the Markit iTraxx SovX CEEMEA ex-EU index unchanged from Thursday at Treasuries plus 212 basis points. The corporate index was also unchanged, at 246 bps over Treasuries.

Meanwhile, numerous issuers took steps toward printing new deals, including the United Arab Emirates' Sharjah Islamic Bank, Commercial Bank of Qatar, China's Yingde Gases Group Co. Ltd., Bangladesh, Singapore's CWT Ltd., Turkey's Sekerbank TAS, Russia's Exillon Energy plc, Brazil's Gerdau SA and India's Tata International Ltd.

Secondary market in focus

In trading on Tuesday, bonds from Russia were quiet, the London analyst said.

"But we are seeing some better bids on Turkish corporates," she said. "The Middle East and North Africa open up steady. However, with the recent move in the U.S. Treasury market, we are struggling a little, spread-wise."

Qatar's 2040s and 2042s were popular in trading on Tuesday, the trader said.

"The latter was back to 120 on the bid side in cash price, having traded a fortnight ago down at 1173/4," he said. "It's a couple better on the week now."

BBK, Emirates see action

Two-way activity was noted for Bahrain-based BBK's 2015s.

"Plenty of action in Emirates airline's 2023s and 2025s," he said. "Saw some nibbling on Kipco and Bahrain was quiet but steady."

And market sources were whispering about the possibility that Turkish lender Turkiye Garanti Bankasi AS (GarantiBank) might issue Islamic bonds.

Gulf banks tap bookrunners

For its upcoming dollar-denominated issue of Islamic bonds, the United Arab Emirates' Sharjah Islamic Bank has mandated Al Hilal Bank, HSBC, Kuwait's Liquidity Management House and Standard Chartered Bank.

The Regulation S deal is expected to be benchmark-sized.

The roadshow will begin on Thursday.

And Commercial Bank of Qatar has mandated BofA Merrill Lynch and Morgan Stanley for an issue of notes, a market source said.

Yingde Gases plans roadshow

China-based industrial gases producer Yingde Gases Group is planning a dollar-denominated issue of notes with bookrunner Deutsche Bank, a market source said.

The Rule 144A and Regulation S notes will be issued by subsidiary Yingde Gases Investment Ltd.

The proceeds will be used for capital expenditures, general corporate purposes and for financing certain indebtedness.

And Bangladesh will issue $1 billion of notes by 2015, with the proceeds going toward infrastructure projects.

CWT, Sekerbank mandate leads

Singapore-based CWT has mandated DBS Bank and Standard Chartered Bank for a roadshow to market a Singapore dollar-denominated deal, a market source said.

And Turkey-based lender Sekerbank has mandated Citigroup, Standard Chartered Bank and UniCredit as the bookrunners for a dollar-denominated issue of notes.

A roadshow in Europe and the United States will begin on Thursday for a Rule 144A and Regulation S deal.

Exillon, Gerdau pick banks

Also on Tuesday, Russia-based oil exploration company Exillon Energy has mandated HSBC and VTB Capital for a roadshow to market a dollar-denominated issue of notes, a market source said.

The roadshow for the Rule 144A and Regulation S deal will begin April 4 and take place in the United States and Europe.

And Brazil-based steel producer Gerdau has mandated JPMorgan and Morgan Stanley as bookrunners for a dollar-denominated issue of notes that will be marketed during a roadshow this week.

The Rule 144A and Regulation S marketing trip will begin Wednesday in New York and London and will conclude on Friday in Los Angeles and Boston.

Tata roadshow ahead

India-based Tata International has mandated RBS as bookrunner for an issue of Singapore dollar-denominated notes and a roadshow, a market source said.

The marketing trip is expected to begin on Wednesday.

A Regulation S deal - issued by Tata International Singapore Pte. Ltd. - will follow.

Tata International is the trading arm of the Tata Group, a Mumbai-based company that focuses on manufacturing and supply chain integration.

TMK draws orders

The final book for Russia-based steel pipe manufacturer OAO TMK's recent $500 million issue of 6¾% seven-year notes was $1 billion, a market source said.

The Rule 144A and Regulation S notes were issued at par to yield mid-swaps plus 527.2 bps via Citigroup, Deutsche Bank and JPMorgan.

KEB oversubscribed

Also oversubscribed was the $350 million issue of 2% notes due April 2, 2018 from Korea Exchange Bank, which priced at 99.49 to yield 2.108%, or Treasuries plus 130 bps.

The deal drew $1.2 billion in orders from 85 accounts, with 84% from Asia and 16% from Europe.

Asset managers picked up 48%, banks 35%, private banks 10%, insurers 4% and government agencies 3%.

BofA Merrill Lynch, BNP Paribas, Citigroup, HSBC, KEB Asia Finance and Hana Daetoo Securities were the bookrunners for the Regulation S deal.

Demand for Dorsett

China-based Dorsett Hospitality International Ltd.'s recent issue of RMB 859 million 6% notes due April 3, 2018 drew RMB 2.7 billion from 80 accounts, a market source said.

The notes priced at par with Barclays Bank plc, Citic Securities Corporate Finance (HK) Ltd., Deutsche Bank AG, Hong Kong Branch and HSBC in a Regulation S deal.

The proceeds will be used for future acquisitions and expansion, as well as for general corporate purposes.

About 53% of the orders came from Hong Kong, 28% from Singapore and 9% from others.

Fund managers accounted for 62%, banks 33% and private banks 5%.

Chinese deals get attention

China State Construction International Holdings Ltd.'s $500 million 3 1/8% notes due April 2, 2018 attracted a final book of $2.1 billion from 120 accounts, a market source said.

The notes priced at 99.5423 to yield Treasuries plus 240 bps with BofA Merrill Lynch, China International Capital Corp. Hong Kong Securities Ltd. and Deutsche Bank in a Regulation S deal.

And the $300 million increase of Greentown China Holdings Ltd.'s 8½% notes due Feb. 4, 2018 that priced at 102.50 to yield 7.863% drew $4 billion in orders.

Deutsche Bank, Bank of China, Goldman Sachs, HSBC, ICBC (Asia), Standard Chartered Bank and UBS were the bookrunners for the Regulation S offering.

Sunac final book

The final book for Sunac China Holdings' $500 million issue of 9 3/8% notes due April 5, 2018 was $4 billion from 170 accounts, a market source said.

About 80% of the orders came from Asia, 18% from Europe and 2% from the offshore United States.

Fund managers took up 67%, private banks 14%, banks 2%, insurers 1% and corporates and others 16%.

The notes came to the market at par to yield 9 3/8% with HSBC, BOCI International, Citigroup, ICBC (Asia), ICBCI Capital and Morgan Stanley were the bookrunners for the Regulation S deal.

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

Orders for El Salvador Trust

Another deal that was oversubscribed came from AES El Salvador Trust II, which priced $310 million 6¾% notes due 2023 at 98.223 to yield Treasuries plus 507.10 bps.

The deal drew more than $1 billion in orders, with 68% from the United States, 15% from the United Kingdom, 8% from Europe, 5% from Latin America and 4% from Asia.

Barclays and Deutsche Bank were the bookrunners for the Rule 144 and Regulation S deal.

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