Powerlong sells notes; IPIC sets talk; Bahrain rebounds; stronger tone seen on low volume

By Christine Van Dusen

Atlanta, March 8 - China's Powerlong Real Estate Holdings was among the few issuers to bring deals to market on a Tuesday marked by a better tone but still-low volumes as emerging markets investors and issuers tracked tensions in Libya and some countries observed International Women's Day.

"The tone is again constructive, though volumes remain below average," a London-based trader said. "U.S. Treasury weakness likewise is helping spreads."

Said another London-based market source: "Everyone is just waiting for news from Libya."

Oil prices undulated as Libyan leader Moammar Gadhafi's forces tried to keep rebels out of Tripoli while government officials considered whether or not the leader should step down. Brent crude traded below $112.50 a barrel during the European afternoon and declined further on news that some Middle Eastern and African countries could boost their oil output.

"Oil was not the only factor driving spread direction," said Gavan Nolan, an analyst with Markit, in a report. "Hawkish noises from the European Central Bank ... unnerved investors fearful of a premature interest rate rise."

Powerlong prints notes

In its new deal, China-based property developer Powerlong Real Estate Holdings sold RMB 750 million 11½% notes due 2014 at 99.383 to yield 11¾%, a market source said.

The notes priced in line with talk, which was set in the 11¾% area.

HSBC, RBS and Macquarie were the bookrunners for the Regulation S-only notes, which are payable in dollars.

Proceeds will be used for general working capital.

The day also saw Fiji set price guidance at the 9% area for a planned issue of between $200 million and $250 million five-year notes, a market source said.

IPIC sets price talk

Abu Dhabi-based oil industry investment entity International Petroleum Investment Co. set price talk for a two-tranche issue of euro-denominated notes due 2016 and 2021, a market source said.

The five-year notes were talked at Treasuries plus the low-200 basis points area. The 10-year notes were talked at Treasuries plus the mid- to high-200 bps area.

The deal initially was expected to include sterling-denominated notes, but the source said that detail had changed. Goldman Sachs, Banco Santander, BNP Paribas, Credit Agricole, Deutsche Bank and UniCredit are the bookrunners for the deal.

"On face value I think the deal looks OK, given that there is an absence of euro paper out there," a source said. "Over time it should get taken down by European retail and real money given its AA rating and fair yield."

The company's existing 2015 bonds - which priced in November at 99.642 - were trading at 96.50 bid, 96.75 offered on Tuesday. The 2020s were seen at 95.65 bid, 95.90 offered. Those notes priced at 99.108.

Roadshows planned

China-based property developer SPG Land Holdings Ltd. is on a roadshow this week for an offering of dollar-denominated senior notes, according to a company filing.

Morgan Stanley and Nomura are the bookrunners for the Regulation S deal.

The marketing trip is taking place in Europe and Asia.

And lender Banco de Credito del Peru has mandated Bank of America Merrill Lynch and JPMorgan for a roadshow in the United States and Europe, a market source said.

The marketing trip started Monday in London and Los Angeles and will travel to Chicago, Zurich, Geneva and Boston before wrapping up in New York on Thursday.

Localiza plans roadshow

Also planning a roadshow is Brazil-based Localiza Rent a Car SA.

The vehicle rental company has mandated Bradesco BBI, Citigroup and Itau for a marketing trip starting Thursday, a market source said.

The roadshow will travel through London, Miami, Geneva, Zurich, Los Angeles and Boston before wrapping up in New York on March 15.

But the market in Brazil wasn't particularly active on Tuesday overall, a New York-based market source said.

"Carnival in Brazil is in full force, so it keeps the local players on the sidelines and takes liquidity out of the markets," he said.

Bahrain tightens

In trading on Tuesday, Bahrain's 2020 notes were seen at 93.50 bid, 94.25 offered after trading Monday at 93.50 bid, 94.00 offered.

"The bond is now 35 bps tighter over the week," the London-based trader said. "They continue their rebound with decent support."

Qatar's Qtel International Finance Ltd.'s 2025 notes - which were seen Monday at 97.75 bid, 88.25 offered - were trading Tuesday at 87.75 bid, 88.50 offered on Tuesday.

"There's been predictable support over the week for the front end," he said.

Commercial Bank of Qatar's 2014 bonds opened at 103.25 bid, 103.75 offered after closing Monday at 103.10 bid, 103.60 offered.

"That's 29 bps tighter on the week, however the bond remains 45 bps wider on the month," the trader said.

Emaar trades up

Also on Tuesday, Dubai-based developer Emaar Properties' 2016 bonds traded at 97.37 bid, 97.87 offered after closing Monday at 97.25 bid, 97.50 offered.

"We've seen some support on Sabic paper over the past week, with the bonds 25 bps to 30 bps tighter," he said.

He also noted that the Emirate of Ras Al Khaimah's bonds remained solid, with the 2016 notes trading at 104.62 bid, 105.62 offered after trading about a month ago at 104.20 bid, 104.70 offered.

"There's been a slight pick-up in activity today," he said. "There's a solid tone on Dubai Water and Electricity Authority and Dubai."

He saw local demand on Dubai's 2014 bonds, which are 20 bps tighter on the month.

"Dubai continues to look appealing, especially on any dips," he said.

Euro zone still struggles

Though most of the market's focus remains on the Middle East, investors remain somewhat concerned about the economic crisis in the euro zone.

In looking at Greece, a debt-saddled country that was formerly the focus of most market-related headlines, the sovereign's five-year credit default swaps were "close to record wides yesterday," Nolan said. "But today it was the country's bonds bearing the brunt."

The sovereign's 2022 bond was trading at about 64.75 during the European afternoon, about 3 points lower than the previous day's close, he said.

"Yields are at or close to record highs for many of the peripheral countries in the euro zone, putting even more pressure on the E.U. authorities to find a solution," he said. "Whether they respond to this pressure is a different matter. Most of the reports emerging from Europe indicate that the radical uses for the (European Financial Stability Facility) that market participants had hoped for are meeting fierce opposition from Germany and others."

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