Kexim approaches primary market again; bonds from Turkey, Dubai, Kuwait, Nigeria fare well

By Christine Van Dusen

Atlanta, Feb. 11 - Export-Import Bank of Korea advanced a new deal on Tuesday as bonds from Kazakhstan saw buying on the back of news that the Central Bank would no longer defend the currency at its previous level.

In other trading during the session, bonds from Turkey received support, a London-based analyst said, noting that buyers emerged for Akbank TAS and Turkiye Garanti Bankasi AS (GarantiBank).

"Bank Asya has also rebounded in recent days," she said, noting it was "quieter in Russia."

From the Middle East, regional accounts were buyers of the limited supply, a London-based trader said.

"Plenty of tricky technical bonds out there, with accounts of the semi-professional variety lurking in the grass, looking for paper," he said, adding there was "serious demand of late for Dubai government paper, pushing this curve higher and tighter."

Also on Tuesday, sovereign bonds from Latin America moved tighter, a New York-based trader said.

"Venezuela shakes off early weakness," he said. "We saw volumes higher than yesterday but still lighter than last week."

Volumes were slightly better for Latin American corporates, another New York-based trader said.

"A few high-grade go-go names traded with decent volume in the Street," he said, pointing to Brazil-based Braskem SA, among others.

Banks from Peru saw bids move higher while other corporates "seem stuck in the mud," he said.

"Dealers are not afraid to bid paper as accounts continue to be slightly better buyers of the spread credits and sellers of the off-the-run high-grade names," he said.

And the new combined $3.5 billion of five- and 10-year notes that Slovenia priced on Monday traded well on Tuesday, moving up 1½ points during the morning.

"The rest of the curve is about 15 basis points tighter," another trader said.

DEWA lags

Dubai Electricity and Water Authority bonds lagged a bit in the morning, making the spread between its 2020s and Dubai's 2020s "very appealing," he said.

Dubai-based Aldar Properties PJSC's 2018s saw two-way action between 101.87 and 102.12 again, he said.

"Dubai Holding's 2017 sterling notes are being dragged higher by the good demand for the likes of Emaar Properties and MAF Holdings," he said. "DP World's 2017s and 2037s traded today with some real-money demand seen, closing them 20 bps better on the week."

Sukuk will be 'soaked up'

The upcoming issue of notes planned by Dubai Investments Park Development Co. should be well received by the market, a trader said.

The company is planning a $300 million issue of five-year Islamic bonds with bookrunners Al Hilal Bank, Citigroup, Dubai Islamic Bank and Emirates NBD in a Regulation S sukuk.

"The tone is very solid for Dubai Investments' sukuk," he said. "If this prices at a decent level it really could get soaked up fairly quickly."

Kipco, Burgan Bank popular

Kuwait Projects Co.'s (Kipco) recent notes were strong performers, a trader said.

"Burgan Bank's 2020 also feels popular, although liquidity is dire," he said.

Saudi Electricity Co.'s bonds were popular, he said, and perpetual bonds saw some two-way activity.

"Busy day," he said. "Plenty of activity and inquiry interspersed with the usual technical and bid-only bonds."

Investors remained attracted to bonds from Lebanon, he said. "I'd call them 10 bps to 15 bps better on the week."

Africa in focus

From Africa, Senegal's 8¾% 2021 notes were quoted at 111.5, 75 bps tighter on the week, a trader said.

"Some bids are creeping back into this space, in line with broader markets retaining their footing," he said. "Even Zambia is tighter over the week by 5 bps."

Sovereign bonds from Nigeria were about 8 bps to 10 bps better on the week, he said.

"But it's still a tricky month there, wider by 40 bps," he said.

Angola, Tunisia improve

Angola's bonds were also improving, and demand was noted for bonds from Tunisia.

"Ghana has been the battler of late," he said. "Their 2023 dollar bond goes out at 91.25 bid, 92 offered, 100 bps wider on the month now."

Egypt's bonds also continued to improve, he said, with the 2020s trading with a par handle.

Ukraine bonds tick down

From Ukraine, most sovereign bonds so far this week have moved lower amid "heavy offers," said Svitlana Rusakova of Dragon Capital.

"Yet the 2017s to 2023s were soon lifted several times, moving the curve closer to unchanged levels," she said.

In the corporate arena, banks and companies from the metals and mining industry saw "decent action," she said.

Kexim talks bonds

Export-Import Bank of Korea set talk at 5.15% for its upcoming A$100 million-minimum issue of notes due Feb. 25, 2020, a market source said.

ANZ and National Australia Bank are the bookrunners for the deal.

Bank deal draws orders

The final book for Export-Import Bank of Malaysia's $300 million 2.874% five-year notes was $3.2 billion from 185 accounts, a market source said.

The notes priced at par to yield 2.874%, or Treasuries plus 140 bps.

BNP Paribas, CIMB, HSBC and Maybank were the bookrunners for the Regulation S deal.

About 50% of the orders came from Asia, 19% from the Middle East, 16% from Europe and 15% from Malaysia.

Fund managers and hedge funds picked up 42%, banks and private banks 30%, central banks and sovereign wealth funds 16%, insurers and pension funds 10% and others 2%.

Beijing developer eyed

Also oversubscribed was China-based Beijing Capital Land Ltd.'s two-tranche issue of RMB 2.25 billion notes due Feb. 17, 2017 and 2019, a market source said.

The deal drew a total of about RMB 4 billion from about 400 accounts.

The RMB 2 billion notes due 2017 priced at par to yield 5¾%.

The RMB 250 million 6 7/8% notes due 2019 also priced at par.

Agile deal oversubscribed

China-based Agile Property Holdings Ltd.'s $500 million 8 3/8% five-year notes attracted a final book of $1.85 billion from 168 accounts, a market source said.

The notes priced at 99.499 to yield 8½% via HSBC, Standard Chartered Bank, Agricultural Bank of China, ABC International and ICBC Asia in a Regulation S deal.

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