ADCB, DEWA may inspire issuance; volumes lighten, spreads widen; Bharti Airtel notes ahead

By Christine Van Dusen

Atlanta, March 4 - Emerging markets assets suffered a lackluster session on Monday, given the continuing uncertainty surrounding Italy's elections and the ongoing battle to avoid a fiscal crisis in the United States.

"Slow start in the Middle East and North Africa," a London-based analyst said. "With the US Treasury moving to sub-1.84%, spreads overall are slightly wider as we fail to move that match higher."

Indeed, the Markit iTraxx SovX index spread moved 3 basis points wider to 183 bps over Treasuries on Monday. The corporate index spread moved out 2 bps, to 232 bps over Treasuries.

"Volumes and interest are light," a London-based trader said.

The primary market also was quiet on Monday, though some issuers are likely hatching plans for new deals, the trader said.

"The successful deals from Abu Dhabi Commercial Bank and Dubai Electricity and Water Authority could tempt more issuers to look at coming to market," he said.

The recent two-tranche issue of $1.5 billion notes due 2018 and 2023 from ADCB did receive some attention in trading on Monday.

The deal included $750 million 2½% notes due 2018 that priced at 99.636. This tranche, less popular than the notes due 2023, traded Monday at 99.49 bid, 99.64 offered.

The second tranche has attracted a great deal of investor interest. Totaling $750 million, the 4½% notes due 2023 priced at 99.127 and were quoted Monday at 100.55 bid, 100.95 offered.

Abu Dhabi Commercial Bank, Barclays, ING, JPMorgan, National Bank of Abu Dhabi and RBS were the bookrunners.

"Still seeing small buying," a trader said.

Said another trader, "Still nibbling on ADCB 2023s near the 100 7/8 to 100.95 level."

DEWA ticks up

The DEWA deal - $1 billion 3% notes due 2018 that priced at par - traded Monday at 100.40 on the bid side, the London analyst said.

Abu Dhabi Islamic Bank, Citigroup, Dubai Islamic Bank, Emirates NBD, RBS and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Dubai Holding saw some two-way activity for its 2014 euro notes between par and 1001/2, a trader said. And Dubai's 2043s received some interest from retail investors.

"Dar al Arkan is holding at 110 mid, and meanwhile, Jafza Holdings is a little heavy, with paper around just above the 114 cash price," he said.

ADIB tightens

Also from the Middle East, the recent $1 billion issue of 6 3/8% perpetual notes from Abu Dhabi Islamic Bank that priced at par opened Monday at 105¼ bid, 106 offered.

Later the notes moved to 105 5/8 bid, 106 3/8 offered.

"That's 32 bps tighter on the week now," a trader said. "ADIB perps remain popular."

Abu Dhabi Islamic Bank, HSBC, Morgan Stanley, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S-only sukuk.

"Seeing demand," the London analyst said.

Bahrain catches a bid

Monday also saw Bahrain's 2020s quoted just below 110, while the 2022s were bid in the 113 to 113.10 area.

Demand was noted for Emirates' 2025 notes.

And Banque Saudi Fransi's 2017 notes - which traded at 100¾ bid, 101½ offered in June - were seen Monday at 102.37 bid, 103.37 offered.

SECO moves higher

The 2.665% 2017 notes that Saudi Electricity Co. priced at par were seen Monday at 103 bid, 103½ offered.

The company's second tranche of the deal - 4.211% notes due 2022 that priced at par - traded at 108.37 bid, 108.62 offered.

HSBC and Deutsche Bank were the bookrunners.

Qtel performs in trading

Qatar Telecom QSC's two-tranche issue of $1 billion notes due 2028 and 2043 also saw a little bit of movement on Monday.

BofA Merrill Lynch, Citigroup, JPMorgan and QNB Capital were the bookrunners for the Rule 144A and Regulation S transaction.

The deal included $500 million of 3.375% notes due 2028 that priced at 98.834. On Monday the notes were seen at 99.06 bid, 99.56 offered.

The second tranche, $500 million of 4.5% notes due 2043, priced at 97.687 and on Monday traded at 98 bid, 98½ offered.

Africa in focus

From Africa, South Africa's Sasol Ltd. generated some interest among investors, a trader said.

"And some nibbling of sovereign paper," he said. "Africa sovereigns are feeling a lot better than a week ago."

And the recent 4¼% 10-year notes from Morocco that priced at 99.228 traded Monday at 102 bid, 103 offered.

The sovereign's 5½% 30-year bonds, which priced at 97.464, were quoted at 100.87 bid, 101.87 offered on Monday.

Barclays, BNP Paribas, Natixis and Citigroup were bookrunners for the Rule 144A and Regulation S deal.

Koc Holding plans notes

In deal-related news, Turkey's Koc Holding AS is planning to issue as much as $1 billion of notes during the next 12 months, a market source said.

No other details were immediately available on Monday.

Koc Holding is an industrial conglomerate based in Istanbul.

Bharti Airtel sets size, tenor

India-based mobile telecommunications company Bharti Airtel Ltd. has set the size at $1 billion and the tenor at 10 years for its planned issue of notes, a market source said.

Barclays, BNP Paribas, Citigroup, Deutsche Bank, HSBC, Standard Chartered Bank and UBS are the bookrunners for the Rule 144A and Regulation S deal.

The notes are expected to price this week.

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