Hebei, IDBI, TEE Land issue notes; Russia widens only slightly; Odebrecht holds steady

By Christine Van Dusen

Atlanta, Oct. 20 – China’s Hebei Iron and Steel Co. Ltd., India’s IDBI Bank Ltd. and Singapore’s TEE Land Ltd. sold notes on a Monday that saw credit default swaps spreads for Russia move only slightly wider, even after Moody’s Investors Service downgraded the sovereign.

This came as the sovereign was poised to sign a gas deal with Ukraine on Tuesday, a London-based analyst said.

“Despite this positive element, however, we see little prospect of the European Union dropping sanctions later this week, following fairly firm rhetoric from both sides,” he said.

Meanwhile, bonds from Turkey and Central and emerging Europe were stronger on Monday morning, he said.

“Turkey’s credit default swaps are 1 basis point tighter,” he said. “Fighting in Kobani remains fierce, although the tide does generally appear to be turning against ISIS, which will reduce risks for Turkey.”

In other trading on Monday, Brazil-based Odebrecht SA saw most of its bonds hold on to recent levels, even as the builder remained a target of a bribery probe, a New York-based trader said.

The bonds haven’t firmed up as much as other Latin American names have during the last few session, but Odebrecht’s 2029s and 2042s were a bit higher on Monday, he said.

The trader said he expects the investigation to blow over and that Odebrecht is likely to suffer the penalty, which is a loss of government contracts for two years.

Odebrecht’s 2029 bonds could be a good bet right now, he said, given that they tend to underperform during weak stretches but bounce back with vigor.

The 2029s traded as low as 94½ in early August but recovered to 102 by late in the month, he said.

Light day for Lat-Am

Other bonds from Latin America experienced light volumes on Monday as most bonds stuck to recent levels, another New York-based trader said.

Spread-based credits were extremely quiet, he said.

And in news from other emerging markets, sources were whispering about possible bond issues from First Gulf Bank PJSC and Rwanda.

Russia sees downgrade

Taking a closer look at Russia, the sovereign’s downgrade from Moody’s was driven by subdued growth prospects and eroding reserves, as well as the continuing tensions with Ukraine, the analyst said.

“We don’t think this downgrade will have much of an effect,” he said. “What is more pressing is Standard & Poor’s planned review of the Russian rating this Friday.”

Middle East in focus

From the Middle East, bonds were relatively stable on Monday, a London-based trader said.

“Of course, high-yield names are still in a world of their own, with sellers of [Dubai-based Topaz Marine] versus nibbling on Kuwait Energy and Dubai Holding,” he said. “Perpetuals were a mixed bag.”

Demand was seen for the perpetuals from Global Education Management Systems Ltd. and Dubai Islamic Bank while sellers emerged for Emirates Islamic Bank and Abu Dhabi Islamic Bank, he said.

And Abu Dhabi Commercial Bank’s recent 2019 notes closed 4 bps tighter on the week, he said.

“A day that promised a lot, with some early action, kind of fizzled out,” he said.

Hebei Iron sells notes

China’s Hebei Iron and Steel priced $500 million 2¾% notes due Oct. 27, 2017 at 99.774 to yield 2.829%, or Treasuries plus 205 bps, a market source said.

HSBC, ABC International, Agricultural Bank of China, ANZ, Morgan Stanley and Standard Chartered Bank were the bookrunners for the Regulation S deal.

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

The issuer is based in Hebei Province.

IDBI Bank prints bonds

India’s IDBI Bank, through its Dubai International Financing Centre branch, priced a $350 million issue of 4 1/8% notes due April 23, 2020 at 99.903 to yield 4.145%, or Treasuries plus 275 bps, a market source said.

ANZ, BNP Paribas, Citigroup and HSBC were the bookrunners for the Regulation S deal.

IDBI Bank is a public sector bank based in Mumbai.

TEE Land does deal

In another new deal, Singapore’s TEE Land priced S$30 million 6½% notes due Oct. 27, 2017 at par to yield 6½%, a market source said.

DMG & Partners Securities and UOB were the bookrunners for the deal.

TEE Land is a residential and commercial property developer.

Swiber gives guidance

Singapore’s Swiber Holdings Ltd. set price talk in the low-to-mid-6% area for its upcoming issue of three-year and Singapore dollar-denominated Islamic bonds, a market source said.

DMG is the sole bookrunner for the Regulation S sukuk.

The proceeds will be used primarily for refinancing existing borrowings, as well as for working capital and general corporate purposes.

Swiber is a Singapore-based offshore oil and gas company.

Unacem sets roadshow

Peru’s Union Andina de Cementos SAA (Unacem) will set out on Tuesday for a roadshow to market a dollar-denominated issue of notes, a market source said.

BBVA, Deutsche Bank and Scotiabank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will begin in Lima and Santiago and travel to Los Angeles and London before concluding on Oct. 24 in Boston and New York.

The cement and concrete company is based in Lima.

“Seems to getting a good reception from accounts so far,” a trader said.

Chilean corporate plans notes

Sociedad Quimica y Minera de Chile is looking to issue $250 million of notes, a market source said.

Other details were not immediately available on Monday.

The issuer is a Santiago, Chile-based chemical company.

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