BBK, Lukoil Plan International Debt: Emerging-Market Bond Alert

The following borrowers in emerging markets are expected to sell international debt. New information is followed by previously reported plans.

BBK is selling $500 million of five-year bonds that will be priced to yield 337.5 basis points more than the benchmark mid- swap rate, said two people familiar with the sale. The lender formerly known as Bank of Bahrain and Kuwait is rated A3 at Moody’s Investors Service and A- at Fitch Ratings.

OAO LUKOIL plans to sell dollar bonds, said two people with knowledge of the matter. Barclays Capital, ING Groep NV and Royal Bank of Scotland Group Plc are managing the sale, which will follow investor meetings starting Oct. 25. The Russian oil producer is rated Baa2 at Moody’s and BBB- at Fitch.

ASIA

AU OPTRONICS CORP. hired Goldman Sachs Group Inc., Bank of America Corp.’s Merrill Lynch, UBS AG, Standard Chartered Plc and Citigroup Inc. for a sale of $600 million of convertible five-year, zero-coupon bonds yielding 2.125 percent to 2.875 percent, according to the terms of the transaction. Taiwan’s second-largest flat-panel maker is rated BB- at Fitch.

AXIS BANK LTD. hired Bank of America Merrill Lynch, Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc for a sale of $500 million in dollar bonds, said a person familiar with the matter. India’s fourth- largest lender by market value is rated Ba1 at Moody’s and BBB- at S&P and Fitch.

BANCO DE ORO UNIBANK INC. said it plans to sell 5 1/2-year dollar bonds aimed at funding expansion, with help from Citigroup Inc., UBS AG and BDO Capital & Investment Corp. The Philippines’ biggest bank by assets is rated Ba3 at Moody’s and BB- at S&P.

EXPORT-IMPORT BANK OF KOREA plans to price a benchmark sale of dollar notes due in January 2021 as early as today to yield about 165 basis points more than similar-maturity Treasuries, said a person familiar with the matter. The lender known as Kexim is rated A1 at Moody’s, A at S&P and A+ at Fitch.

HIDILI INDUSTRY INTERNATIONAL DEVELOPMENT LTD. hired Citigroup Inc., Bank of America Corp., UBS AG and JPMorgan Chase & Co., for a proposed sale of international senior bonds, according to the Hong Kong stock exchange. The Chinese coal- mining company is rated BB- at S&P.

ICICI BANK LTD. hired Barclays Capital, Citigroup Inc. and Deutsche Bank AG to sell as much as $1 billion of bonds with maturities of between five and 10 years as soon as in October, according to three people familiar with the offering. India’s second-biggest lender is rated Ba1 by Moody’s and BBB- by S&P.

INDONESIA began marketing a sale of 10-year Samurai bonds and told investors it may price the notes on Nov. 4 to yield between 50 basis points and 70 basis points more than the yen swap rate, said a person familiar with the matter. Daiwa Securities Capital Markets Co. and Nomura Securities Co. are managing the sale, said the person. The country is rated Ba2 at Moody’s, BB at S&P and BB+ at Fitch.

KOREA GAS CORP. hired five banks for a sale of as much as $1 billion in dollar bonds to fund overseas investments, said a person familiar with the matter. The world’s biggest buyer of liquefied natural gas is rated A1 at Moody’s, A at S&P and A+ at Fitch.

KOREA NATIONAL OIL CORP. hired Barclays Plc, BNP Paribas SA, Credit Suisse Group AG, Deutsche Bank AG and Korea Development Bank for a sale of dollar bonds, a person familiar with the deal said on Oct. 6. The company known as KNOC said in September it plans to raise between $500 million and $1 billion to fund acquisitions. KNOC is rated A1 by Moody’s and A by S&P.

RELIANCE COMMUNICATIONS may sell dollar bonds or borrow from banks overseas to repay about 86 billion rupees ($1.9 billion) of debt, said a person familiar with the plan. India’s second-largest mobile phone operator has no rating from Moody’s, S&P or Fitch.

RURAL ELECTRIFICATION CORP. hired Royal Bank of Scotland Group Plc, Credit Agricole CIB and Standard Chartered Plc for a sale of $500 million of bonds in November, Finance Director Hari Das Khunteta said. India’s state-run lender to power projects is rated Baa3 at Moody’s and BBB- at Fitch.

TRAVELLERS INTERNATIONAL HOTEL GROUP INC. hired UBS AG, Deutsche Bank AG and Banco de Oro Unibank Inc. to help it sell seven-year dollar bonds, said a person familiar with the matter. The Philippines casino operator will meet investors in Hong Kong and Singapore from Oct. 19, the person said. The company has no credit ratings on Bloomberg data.

VIETNAM NATIONAL COAL-MINERAL INDUSTRIES GROUP hired Australia & New Zealand Banking Group Ltd., Credit Agricole CIB and Citigroup Inc. as advisers on a possible dollar bond sale, said two people familiar with the matter. The company, also known as Vinacomin, is rated Ba3 at Moody’s and BB at S&P,

CENTRAL, EASTERN EUROPE

ZAO ALROSA hired JPMorgan Chase & Co., UBS AG and VTB Capital to organize meetings with investors starting Oct. 20 before a benchmark sale of dollar Eurobonds, said a banker with knowledge of the deal. The Russian diamond producer is rated Ba3 at Moody’s and B+ at S&P.

AVANGARDCO INVESTMENTS PUBLIC LTD. plans to sell $250 million to $350 million of five-year bonds that may yield less than 9 percent, said a person familiar with the matter. Ukraine’s biggest egg producer, which hired Troika Dialog and JPMorgan Chase & Co. for its debut sale of dollar bonds, is rated B at Fitch.

BELARUS plans to test the U.S. and Asian debt markets, as well as selling ruble-denominated bonds, Finance Minister Andrei Kharkovets said, declining to comment on the timing of possible sales. The country is rated B1 at Moody’s and B+ at S&P.

BULGARIA may sell bonds in international markets early next year to help cover its budget deficit, said Finance Minister Simeon Djankov. The country is rated Baa3 at Moody’s, BBB at S&P and BBB- at Fitch.

CREDIT BANK OF MOSCOW plans to sell five-year dollar bonds with help from Commerzbank AG, ING Groep NV and Raiffeisen Bank International, said a banker familiar with the transaction. The lender is rated B1 at Moody’s and B+ at Fitch.

OAO GAZPROM plans to sell its first international bonds in more than a year by the end of 2010, said Yana Kolosovskaya, the company’s head of loans and guarantees. The Russian gas export monopoly is rated Baa1 at Moody’s and BBB at S&P and Fitch.

POLAND will sell yen-denominated bonds this year in two maturities, with a total value “similar” to the 44.8 billion yen of three- and five-year bonds sold in November 2009, said Deputy Finance Minister Dominik Radziwill. The sale may take place after a road show in the second half of November, he said. The country is rated A2 at Moody’s and A- at S&P and Fitch.

RUSSIA may sell its first bonds in euros next year as the government seeks to set a “benchmark” to help domestic companies borrow in the currency, Deputy Finance Minister Dmitry Pankin said. The country is rated Baa1 at Moody’s and BBB at S&P.

MIDDLE EAST & AFRICA

ABU DHABI ISLAMIC BANK PJSC said it will meet investors in Asia, Europe and the Middle East starting this week before a possible sale of Islamic bonds. The United Arab Emirates’ second-biggest bank complying with Shariah principles hired HSBC Holdings Plc, Standard Chartered Plc and Barclays Plc to help sell bonds, two bankers familiar with the plan said last week. The lender is rated A2 at Moody’s and A+ at Fitch.

INTERNATIONAL PETROLEUM INVESTMENT CO. hired banks to sell a benchmark-sized bond after investor meetings starting next week, Reuters reported, citing a banker familiar with the plan. HSBC Holdings Plc, Standard Chartered Plc, Royal Bank of Scotland Group Plc, Bank of America Merrill Lynch, Goldman Sachs Group Inc. and National Bank of Abu Dhabi PJSC were mandated to manage the sale, the newswire reported. The Abu Dhabi-based company is rated Aa3 at Moody’s and AA at S&P and Fitch.

JORDAN hired JPMorgan Chase & Co., HSBC Holdings Plc, Credit Suisse Group AG and Arab Bank Plc for a Eurobond sale, said Finance Minister Mohammad Abu Hammour. The country is rated Ba2 at Moody’s and BB at S&P.

NIGERIA plans to appoint two banks this month to manage the sale of a $500 million, 10-year Eurobond, the Debt Management Office said. Barclays Capital and FBN Capital Ltd. were named advisers for the transaction. Africa’s most populous country and top oil producer is rated B+ by S&P and BB- by Fitch.

SAUDI ARAMCO and TOTAL SA plan to sell Islamic bonds valued at $1 billion this year to fund construction of their joint oil refinery in Jubail, said Simon Eedle, global head of Islamic banking at Credit Agricole SA, the sale’s lead arranger. Aramco has no credit ratings, according to data compiled by Bloomberg.

TRANSNET LTD. said it may sell $1 billion worth of bonds in international markets in about three months to fund expansion. South Africa’s state-owned ports, rail and pipeline operator is rated A3 at Moody’s, BBB+ at S&P and BBB- at Fitch.

LATIN AMERICA & CARIBBEAN

ARGENTINA received suggestions from Wall Street bankers to sell bonds, Ambito Financiero newspaper reported, without saying how it obtained the information. One investment bank offered to arrange a sale of $1 billion of five-year bonds paying 8.75 percent interest, the Buenos Aires-based newspaper said. The proposals were made during a meeting between Economy Minister Amado Boudou and 35 investment fund managers at Deutsche Bank AG’s offices in New York, the newspaper said. Argentina is rated B3 at Moody’s and B at S&P.

BUENOS AIRES city officials will meet with investors in Washington this weekend to discuss a possible sale of 10-year bonds to finance the 2011 budget, El Cronista reported, without saying where it obtained the information. Argentina is rated B3 at Moody’s and B at S&P.

CODELCO hired Deutsche Bank AG and HSBC Holdings Plc for a bond sale after investor meetings in Los Angeles, London, Boston and New York starting on Oct. 21, said a person familiar with the transaction. The world’s largest copper producer, based in Chile, is rated A1 at Moody’s and A at S&P and Fitch.

CORPORACION ANDINA DE FORMENTO hired Nomura Securities Co. and Mizuho Securities Co. for a sale of Samurai bonds, a person familiar with the matter said. The Venezuelan development bank known as CAF is rated A1 at Moody’s and A+ at S&P and Fitch.

COSTA RICA will sell its first international bonds since 2004 after Moody’s raised the country’s credit rating to Baa3, said Laura Chinchilla, the country’s president. The Central American country is rated BB at S&P and Fitch.

PANAMA plans its first yen-denominated bond sale with an offer to raise the equivalent of $500 million on Japanese markets early next year, Finance Minister Alberto Vallarino said. The country is rated Baa3 at Moody’s and BBB- at S&P and Fitch.

PETROLEOS DE VENEZUELA SA said it hired Citigroup to help sell $3 billion of 8.5 percent bonds due in 2017 at par value. Venezuelans can buy the notes in bolivars and resell them abroad to obtain dollars. The state-owned oil company known as PDVSA is rated B1 at Moody’s and B+ at S&P and Fitch.

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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