Dubai Investments prices bonds; trading active; Mexico, Beijing Energy could print deals

By Christine Van Dusen

Atlanta, Feb. 13 - Dubai Investments Park Development Co. priced its awaited dollar-denominated offering of notes due in 2019 on Thursday amid active trading of other Middle Eastern bonds.

"We traded good size of National Bank of Abu Dhabi 2019s," a London-based trader said. "These have had a very good run and have been notoriously hard to source. They close well-offered for a nice change."

Bonds from Dubai Electricity and Water Authority also were active on Thursday, he said.

"The market is fairly well-supported, but I did find it a little easier today to buy paper," he said. "It probably makes sense, as we've had a good run and some accounts seem to be either making room, lightening up or questioning some valuations."

Long-dated bonds remained popular, he said.

Bonds from North Africa performed well on Thursday, with Egypt holding steady and Morocco and Tunisia seeing demand, a London-based trader said.

"Really illiquid, though," he said. "For the most part, the rest of it was up for sale again."

Some buyers were spotted for Ghana's 2023s after the bonds widened about 75 bps on the week, he said.

"The South Africa sovereign is closing circa 7 bps to 9 bps wider," he said. "Angola is at 107.25 mid."

Bonds from Nigeria saw sellers while demand was seen for Namibia.

But emerging markets bonds from other regions were under pressure, including those from Slovakia and Hungary, a London-based analyst said.

And bonds from Ukraine have been drifting lower so far this week, said Svitlana Rusakova of Dragon Capital.

"The move wasn't particularly strong, down 1 point, on average," she said.

But this slow descent "amid no good news ... is causing tangible anxiety in the market," she said.

Venezuela down; Argentina up

Looking to Latin America, most corporate bonds ended Thursday's session nearly unchanged, a New York-based trader said.

Venezuela and PDVSA bonds closed somewhat lower on higher volumes and better selling, he said.

Argentina bonds, however, ended the day higher.

Liquidity was a challenge, and low-beta names ticked up on a price basis in line with the rally in U.S. Treasuries, he said.

Dubai park sells notes

In its new deal, Dubai Investments Park - a subsidiary of Dubai Investments PJSC - sold $300 million five-year Islamic bonds at par to yield 4.291%, or mid-swaps plus 265 bps, a market source said.

The notes were talked at a spread in the 300 bps area.

Al Hilal Bank, Citigroup, Dubai Islamic Bank and Emirates NBD were the bookrunners for the Regulation S sukuk.

"She traded heavy all afternoon to close 100.37 bid, 100.57 offered," a trader said. "The range we traded was 100.20 to 100.80."

He expects the notes will, "over time, get soaked up," he said.

"It's a sukuk, a $300 million issue and has a headline yield north of 4%," he said.

Turkey sees demand

The new issue of $1.5 billion notes due in 2045 from Turkey was met with strong demand from investors in the United States, a trader said.

The notes came to the market at a yield of 6.7%, following talk of 6¾% to 6 7/8%.

BofA Merrill Lynch, BNP Paribas and Goldman Sachs were the bookrunners for the Securities and Exchange Commission-registered deal.

"The deal is four-times oversubscribed," she said.

The final book was more than $6 billion with orders from 300 investors, with 45% from the United States, 33% from the United Kingdom, 12% from Turkey and 10% from others.

Sovereign will issue more

Market-watchers are expecting Turkey to issue euro-denominated notes or Islamic bonds this year, a trader said.

"With $4 billion now issued this year, Turkey has $2.5 billion of external debt left to issue this year, based on guidance," she said.

"The new deal has been trading well, about 1½ points above reoffer. But the weakness this morning means it is now up a 1/2-point from reoffer."

Mexico, Beijing Energy eyed

Mexico is looking to issue more bonds this year, a market source said.

And China's Beijing Energy Investment Holding Co. is looking to issue dollar-denominated notes, a market source said.

No other details were immediately available on Thursday.

Sberbank in focus

Russia's OAO Sberbank was in focus on Thursday as the Moscow-based lender prepared to bring a dollar-denominated offering of notes to the market.

BofA Merrill Lynch, Credit Suisse, Deutsche Bank and Sberbank CIB are the bookrunners for the deal.

Market sources are expecting the deal to yield between 5.85% and 5.95%.

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