EM secondary markets softer; primary active; Arab Petroleum, Poland’s BGK price deals

By Rebecca Melvin

New York, Oct. 25 – Emerging secondary markets were slightly soft early Wednesday as primary markets continued to price new deals, a London-based market source said.

Markets remain cautious following rates volatility that caused Treasuries to surge to a seven-month high.

In the Middle East region, Saudi Arabia’s Arab Petroleum Investments Corp. priced a $500 million Islamic bond, or Sukuk, at par to yield 3.141%, or mid-swaps plus 100 basis points. But the deal priced late in the London-trading session with no aftermarket action yet seen.

Also new to the market on Wednesday was an issue from Poland’s Bank Gospodarstwa Krajowego, which priced €750 million of 10.5-year notes with a 1 5/8% coupon at 99.821. The Regulation S senior notes are guaranteed by the Republic of Poland, with proceeds earmarked for a national road fund.

Abu Dhabi Crude Oil Pipeline LLC, wholly owned by Abu Dhabi National Oil Co., guided talk on its $3 billion offering of senior notes (expected rating: AA/AA) in 12-year and 30-year tranches, a market source said.

Pricing of the $800 million tranche of 2029 bullet notes was guided to a yield in the 3.9% area.

The $2.2 billion tranche of 2047 amortizing notes was guided to a yield in the 4.8% area.

Pricing of the Rule 144A and Regulation S notes was expected to occur on Thursday with settlement on Nov. 2.

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