Primary sees deals from Sharjah, Shimao Property; Russia, Turkey CDS flat; roadshows ahead

By Christine Van Dusen

Atlanta, March 10 – Sharjah Islamic Bank PJSC and China’s Shimao Property Holdings Ltd. printed notes on Tuesday as bonds from Russia moved slightly wider on the move in rates, following the previous day’s profit taking and widening as fighting surged overnight in Donetsk.

“Tensions between the West and Russia remain raised as well, with the United States planning to send 3,000 troops to train in the Baltic States,” a London-based analyst said.

In other news related to Russia, Fitch Ratings is expected to review its BBB- and negative outlook for the sovereign.

“Credit default swaps are unchanged here this morning,” he said.

Turkey’s credit default swaps spreads were also unchanged on Tuesday morning after some small tightening on Monday, driven by a strengthening of the lira, he said.

“Helped by better comments from the government,” he said. “Cuts in FX deposit rates also helped.”

Bonds from Central and emerging Europe opened flat after a mixed session on Monday that saw Hungary widen 10 basis points on rate concerns, he said.

Asian credits began Tuesday’s session unchanged but suffered as the strong dollar raised concerns about outflows from the region and as real-money sellers pushed bonds lower, a London-based trader said.

“High-grade cash closed 1 bp to 3 bps wider, with benchmark names under pressure,” he said. “In the Hong Kong and China space, bank seniors remained well bid, with buyers in 2020 bank paper.”

Technology names from China closed 2 bps to 5 bps wider and property companies were unchanged to a ¼ point lower, he said.

In deal-related news, Sappi Southern Africa (Pty.) Ltd., Bahrain’s BBK BSC and South Korea’s Shinhan Bank set roadshows.

Asian sovereigns in focus

Korea softened and onshore accounts remained on the sidelines, the London trader said.

“India closed generally unchanged with demand slowing,” he said. “Had good two-way flow in the corporate space while financials are technically well bid.”

The Philippines curve closed unchanged as local bank buyers emerged, and Indonesia’s curve was “very weak,” he said, “with the long end down 2 points, the belly down 1 point and 10 bps to 13 bps wider on spread.”

Sharjah bank issues bonds

In its new deal, Sharjah Islamic Bank sold $500 million 2.843% notes due March 17, 2020 at par to yield 2.843%, or mid-swaps plus 110 bps, a market source said.

The notes were talked at a spread in the mid-swaps plus 125-bps area.

Abu Dhabi Islamic Bank, Al Hilal Bank, Dubai Islamic Bank, Emirates NBD Capital, HSBC, KFH Investment, Noor Bank and Standard Chartered Bank were the bookrunners for the Regulation S deal.

“That doesn’t appear too cheap to the outstanding Sharjah 2018s,” a trader said before the pricing. “But spread curves in the UAE banks are very flat – investors more focused on yield – SIB only issues once every two years, and we have seen strong performance from other new bank paper in the region recently.”

Shimao prices tap

Also on Tuesday, Hong Kong’s Shimao Property Holdings priced $300 million 8 3/8% notes due Feb. 10, 2022 at 101.723 to yield 8%, a market source said.

The notes were talked at 8%.

The original $800 million notes priced in February at par to yield 8 3/8%.

HSBC, Standard Chartered Bank, Goldman Sachs, UBS, JPMorgan, Morgan Stanley and CLSA Ltd. were the bookrunners for the Regulation S deal.

The proceeds will be used to finance existing and new property development projects and for other general corporate purposes.

Millicom sets initial talk

Millicom International Cellular SA’s $500 million offering of 10-year senior notes (Ba2/BB+) comes with initial guidance in the 6¼% area, according to a market source.

The quick-to-market deal was scheduled to be shopped via an investor conference call earlier today, and is also set to price today.

Joint bookrunner BNP Paribas will bill and deliver. Citigroup, Goldman Sachs International and JPMorgan are also joint bookrunners.

The Rule 144A and Regulation S for life notes come with five years of call protection. However a special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

Proceeds will be used to redeem the Telemovil Finance 8% senior notes due 2017, as well as to fund capital expenditures, and for general corporate purposes.

Millicom is a Stockholm, Sweden-based telecommunications and media company that operates in Latin American and Africa.

Sappi sets roadshow

Johannesburg-based paper manufacturer Sappi Southern Africa will set out on Wednesday for a roadshow to market a €450 million issue of seven-year notes, a market source said.

Credit Agricole, JPMorgan, UniCredit, Citigroup, Erste Group, KBC, RBS and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to refinance the company’s €250 million notes due in 2018 and $300 million in notes due 2019.

Roadshow for BBK

Bahrain-based retail lender BBK has mandated BNP Paribas, HSBC and National Bank of Abu Dhabi to lead a roadshow for an issue of dollar-denominated and benchmark-sized notes, a market source said.

The roadshow for the Regulation S deal will begin on Thursday.

Shinhan to market bonds

South Korea’s Shinhan Bank will set out on March 16 for a roadshow to market a possible issue of notes, a market source said.

BofA Merrill Lynch and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow starts in New York and will travel to Philadelphia, San Francisco and Reno before concluding on March 20 in Los Angeles.

Telekom Malaysia eyes issuance

Telekom Malaysia Bhd. is looking to issue up to $750 million of Islamic notes, a market source said.

Other details were not immediately available on Tuesday.

Telekom Malaysia is a Kuala Lumpur-based telecommunications services company.

Paul A. Harris contributed to this article.

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