Kuwait bank, Dalian Wanda arrange roadshows; volatility hits markets; Ukraine bonds fall

By Christine Van Dusen

Atlanta, March 26 – National Bank of Kuwait and China’s Dalian Wanda Commercial Properties Ltd. announced roadshows on a volatile Thursday as oil prices rallied, weekly jobless claims in the United States declined, and the European Central Bank said it expected to hit its monthly target for buying bonds to buoy the economy.

The session was also impacted by a flight-to-quality approach from investors who sold off bonds as equities and Latin American markets weakened.

“Oil names were generally better bid, as the rally in crude continued,” a London-based trader said. “The China oil complex held in firm while the rest of the sector closed a couple wider.”

Malaysia-based Petroliam Nasional Bhd.’s (Petronas) $5 billion of notes due in five, seven, 10 and 30 years closed unchanged to 5 basis points tighter on Thursday.

“The 2025s and 2045s were outperforming,” he said.

High-grade property companies from China widened slightly while notes from India closed Thursday unchanged, with sellers emerging for lower-quality bank paper, he said.

Indonesia-based PT Astra Sedaya Finance’s 2 7/8% notes due in 2018 that came to the market at 99.934 to yield Treasuries plus 200 bps saw good two-way flows near par bid, 100 3/8 offered.

“The bonds closed at par bid, 100¼ offered,” he said.

From Ukraine, eurobonds lost several percentage points by Thursday “amid rumors that major debt holders – including Russia, Franklin Templeton and Rothschild funds – will not accept a principle haircut,” according to a report from Schildershoven Finance BV.

The sovereign’s 2017s have fallen to a historic low, the report said.

Lat-Am in focus

Looking to Latin America, the market held in, even amid larger market volatility, a New York-based trader said.

“Even though our trading breadth has little depth, our performance has been pretty admirable,” he said.

Brazil-based Petroleo Brasileiro SA saw its spreads tighten into the close after a day of lighter-than-normal volumes and amid “ever-changing and contradicting headlines, day to day,” he said.

Among Latin American sovereigns, Argentina’s Bonar 2024s saw selling at 107, down one point from Wednesday.

Bonds from Venezuela and PDVSA were mixed, he said.

Recent issues tighten

Taking another look at Asia, the new issue of notes from Korea’s Hyundai Capital Services – $400 million 2 5/8% notes due 2020 that priced at 99.848 to yield Treasuries plus 125 bps – moved tighter on Thursday, trading at 118 bps before closing the Asian session at 119 bps bid, 116 bps offered, a trader said.

ANZ, BofA Merrill Lynch, Citigroup and Deutsche Bank were the bookrunners for the Rule 144A and Regulation S deal.

And China-based Beijing Capital Group Co. Ltd.’s new $600 million 2 7/8% notes due 2018 that priced at 99.934 to yield 2.898%, or Treasuries plus 200 bps, opened tighter, he said.

The notes traded in the 224 bps to 220 bps range on Thursday before closing at 225 bps bid, 222 bps offered, he said.

Two issuers arrange roadshows

National Bank of Kuwait set out on Thursday for a roadshow to market a benchmark-sized issue of dollar-denominated perpetual notes, a market source said.

HSBC and Standard Chartered Bank are the bookrunners for the Regulation S deal.

And China-based real estate and hospitality conglomerate Dalian Wanda Commercial Properties will depart April 1 for a roadshow to market a possible issue of notes with Citigroup, Goldman Sachs, HSBC and Morgan Stanley.

The roadshow will start off in Hong Kong and travel to Singapore, London, New York and Boston before concluding on April 16 in Los Angeles.

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