Slovenia's Sid Banka prices notes while Middle East tensions in focus; Powerlong on deck

By Christine Van Dusen

Atlanta, March 7 - With turmoil continuing in Libya and oil prices climbing past $105 a barrel, Slovenia's Slovene Export and Development Bank was among the few issuers to sell notes on a Monday that saw emerging markets investors sticking to the sidelines.

"The Middle East still dominates," a London-based market source said. "There are a lot of balls in the air, a lot of moving parts."

Volumes, he said, were thin and issuance was slow.

"Volumes are very light," he said. "Mondays typically tend to be the slowest day in the week, and this is no exception."

Still, the day did see several Chinese corporates - including Powerlong Real Estate Holdings, CLP Power Hong Kong Ltd. and Delong Holdings Ltd. - take steps toward market, along with the Development Bank of the Philippines.

Russia on holiday

Most bonds were barely moving in the secondary market.

"Russia's 30s are up ¼ point to 117," he said. "And a couple of issues in the Russian banking space, from VTB Bank and Vnesheconombank, are all a little bit better bid. But there's not much turnover."

That was due, in part, to the fact that Russia is on holiday for the early part of this week.

Five-year credit default swaps for Russia were "playing solid catch-up today, now only 12 to 15 bps or so north of Qatar," another market source said. "There's amazing strength in Russian assets."

Oschadbank in focus

The London-based market source was keeping an eye on the $500 million notes due March 10, 2016 from Ukraine's OJSC Oschadbank, which priced Thursday at par to yield 8¼%.

Credit Suisse and Morgan Stanley were the bookrunners for the Regulation S deal.

"That's doing fine now," he said. "It came at par and is now at 100.625, which is where it was on Friday. The high trade was probably around 101.

"It hasn't shifted a lot, day to day, but there's a little bit of activity," he said. "It's not terribly active or racing away but seems pretty content where it is."

Middle East activity slows

In other trading on Monday, Bahrain's 2020 notes were seen at 93.50 bid, 94,00 offered after trading on Thursday at 92.25 bid, 93.25 offered.

"Bahrain continues to hold fairly well," a London-based trader said.

Qatar's Qtel International Finance Ltd.'s 2025 notes - which were seen Thursday at 87.37 bid, 88.12 offered - were trading Monday at 97.75 bid, 88.25 offered.

"Activity is still well below average in the Middle East and North Africa," he said. "In saying that, there has been some definite dipping of the toe into the more solid names, like Qatar and Abu Dhabi."

Commercial Bank of Qatar's 2014 bonds closed Monday at 103.10 bid, 103.60 offered after trading on Thursday at 102.60 bid, 103 offered.

"That's now a point off the low print," he said.

And Emaar Properties' 2016 closed Monday at 97.25 bid, 97.50 offered, about 50 bps wider on the month due to exposure in Libya and Egypt.

Tunisia shares up, bonds flat

The London-based trader was also watching Tunisia, which on Monday saw its shares climb to their highest point in almost 10 years after several steps were taken toward stability, including the dissolution of the state security agency and the plans for a new constitution and cabinet.

In response, Tunisia's 2012 notes were trading at 104 bid, 105 offered while its 2013s were seen at 102.75 bid, 103.75 offered and its 2020s were at 91 bid, 93 offered.

"The bonds I think are basically unchanged, as they have been trading all the time," he said. "At least their market is open, as opposed to the Egyptian bourse, which remains closed."

Sid Banka sells notes

In its new deal, Slovenia's Slovene Export and Development Bank (Sid Banka) priced a €350 million tap of its 3% notes due April 21, 2015 at 96.675 to yield mid-swaps plus 103 bps, a market source said.

The notes priced in line with talk of mid-swaps plus the 103 bps area.

Deutsche Bank, HSBC and Unicredit were the bookrunners for the deal.

The original issue totaled €750 million and priced in April 2010 at 99.835.

Also on Monday, the Development Bank of the Philippines, a state-owned lender, announced plans for a dollar-denominated issue of bonds, a market source said.

Credit Suisse, Goldman Sachs, HSBC and JPMorgan have been linked to the transaction.

China heats up

China-based property developer Powerlong Real Estate Holdings set price talk for its planned issue of renminbi-denominated notes due 2014 at the 11¾% area, a market source said.

HSBC, RBS and Macquarie are the bookrunners for the Regulation S-only deal.

The notes will be payable in dollars, and proceeds will be used for general working capital, according to a company filing.

Also from China, electric company CLP Power Hong Kong embarked on a roadshow on Monday with bookrunners Barclays Capital and Standard Chartered, a market source said.

No other details were immediately available.

And steel manufacturing and trading group Delong Holdings Ltd. has revived plans for a dollar-denominated issue of notes, a market source said.

The company in February delayed an issue of up to $250 million of senior notes due 2016 via Credit Suisse in a Rule 144A and Regulation S transaction.

Bancomer in demand

In other news, the final book for the $2 billion two-tranche issue of notes due 2016 and 2021 from Mexico-based lender BBVA Bancomer SA was about $4 billion, a market source said.

BBVA, Deutsche Bank and Goldman Sachs were the bookrunners for the Rule 144A and Regulation S transaction, which included $750 million 4½% senior notes due March 10, 2016 that priced at 99.285 to yield Treasuries plus 237.5 bps.

The second tranche totaled $1.25 billion 6½% subordinated tier 2 notes due March 10, 2021, which priced 98.645 to yield Treasuries plus 312.5 bps.

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