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Daily Roundup

Jordan issues local currency sukuk – PDVSA struggles with debt swap uptake – Fullerton India issues debut masala bond – Tatfondbank markets US$150mn Eurobond – Warba Bank set to issue US$250mn in Tier 1 sukuk – Argentine Province of Santa Fe hires banks ahead of dollar bond sale

Oct 18, 2016 // 5:19PM

The Jordanian government has raised JOD34mn (US$47.9mn) in local currency ijara sukuk, which carry a 5-year tenor and an expected profit rate of 3.01%. According to the country’s Finance Minister, the deal was more than 3x oversubscribed. The Islamic Corporation for the Development of the Private Sector (ICD) facilitated the transaction’s issuance.

Venezuela's state oil company PDVSA plans to extend the second deadline for a bond swap to the end of the week after seeing extremely low uptake on its offer. If the exchange is not successful, the company could default on its existing debt.

Fullerton India closed a debut Rs 500 crore bond sale in offshore markets, the first masala bond by a domestic non-banking lender. The 3-year notes pay a fixed annual coupon of 8.2% and will be listed on the Singapore Stock Exchange. Credit Suisse advised on the sale.

Russia's Tatfondbank announced plans to issue 3-year US$150mn Eurobond, rated B by S&P, Reuters reported. The bank plans to hold a roadshow in Zurich, Geneva, London, Hong Kong, Singapore, and Moscow starting from 17 October.

Warba Bank is set to issue US$250mn in Tier 1 sukuk according to sources speaking to Reuters.

The United Arab Emirates will lend Serbia US$1bn via a 10-year loan to help the Balkan country refinance its existing debts and fund the budget deficit. Serbia has been pushing the IMF to raise its maximum debt ceiling to it can boost spending.

Egypt's Ministry of Finance cancelled its 1.5-year treasury bond at Monday's auction while yields on its 3 and 7-year notes rose to 17.037% (from 16.982%) and 17.419% (from 17.393%) respectively.

Qatar’s Central Bank is offering QAR3bn (US$825mn) of government bonds in its third domestic bond sale this year, according to a report from Reuters.

The IMF recently reported on the significance of the debt problem in China. According to the report, China's "zombie companies" debt is estimated at approximately 15.5% of total corporate loans. Since 2005, China’s total debt has increased from 160% of GDP to 247% in 2015, while the corporate debt has jumped from 105% of GDP to 165% during the same period.

The Argentine Province of Santa Fe has hired banks to arrange investor meeting ahead of a potential US$250mn bond sale. Citi, JP Morgan and HSBC are managing the sale.

Brazil's Central Bank has changed forecasts for the key interest rate. According to new predictions, the benchmark rate will fall to 13.5% from the current rate of 14.25% by the end of 2016. Previously, analysts expected interest rates to decline to 13.75% by the end of 2016.

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