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The Daily Roundup

Kuwait Energy plans RBL US$100mn facility – Saudi liquidity improves – Attijariwafa, UBA sign MoU – Lagos State preps NGN60bn bond – Unifin to raise US$120mn in peso bonds – BNDES, CBI launch green bond fund – Venezuela to introduce higher denominations of notes – RBI proposes allowing banks to open Islamic windows

Dec 5, 2016 // 3:58PM

MIDDLE EAST & TURKEY

Kuwaiti oil and gas firm Kuwait Energy plans to close a reserve-based lending (RBL) loan facility of up to US$100mn with the European Bank for Reconstruction and Development (EBRD) by the end of the year, according to Reuters.

Saudi Arabia’s three-month interbank rate also dropped by up to 30bp from its peak in October as the liquidity situation in the country continues to improve, according to Al-Rajhi Capital.

Saudi Arabia's ACWA Power expects to issue a 13.5-year US$1bn bond at a 100-200bp premium over the sovereign's comparable notes, slightly wider than expected.

AFRICA

Attijariwafa Bank and United Bank for Africa (UBA) Plc have signed a Memorandum of Understanding (MoU) to strengthen their collaborative efforts in correspondent banking, investment funding, trade finance and project finance on the continent.

Rating agency Standard and Poor's (S&P) on Friday affirmed South Africa's sovereign credit rating at one notch above junk status, keeping it at BBB with a negative outlook.

The Lagos State Government said it is set to go to the capital markets to float a NGN60bn bond this month, the proceeds of which will be used for infrastructural development. The bond is the first tranche of the NGN500bn bond programme approved by the Lagos State House of Assembly a several months ago.

AMERICAS

Credito Argentino S.A. issued ARS150mn and ARS113.5mn in 1-year and 2-year notes, respectively, in the country's local markets on Friday. Banco de Valores and INTL CIBSA arranged the deal.

Mexican financial services unit Unifin is set to raise over US$120mn in peso-denominated dual tranche notes.

Embattled Brazilian engineering firm Odebrecht has taken out full-page advertisements in Brazil's main newspapers last week and this week to apologise for its role in the country's largest corruption scandal to date. The move comes shortly after the firm secured a leniency deal from state prosecutors, allowing it to resume bidding on government contracts.

The investment arm of Brazilian development bank BNDES has unveiled a US$144bn green bond fund for renewable projects and qualifying infrastructure debentures, launched in conjunction with the Climate Bonds Initiative (CBI). BNDESPar said the fund, which will carry a deployment tenor of 15 years, should be operational by July 2017.

Venezuela's Central Bank plans to introduce six new bills with denominations ranging from 500 to 20,000 bolivars, which will come into circulation on 15 December, after months of skyrocketing inflation caused the currency's value to tumble. The largest note currently in circulation is 100 bolivars, currently worth about 2 US cents.

ASIA

China’s macroeconomic indicators are starting to show positive signs, with the Caixin Service PMI hitting 53.1 in November - up from 52.4 a month earlier, according to Schildershoven.

The number of Chinese local-government owned entities (LGFV) issuing bonds in international credit markets has more than doubled from US$4bn to US$10.5bn over the past year, according to data from Dealogic, leading to concerns that the credit quality of Chinese issuers participating in offshore markets is eroding.

A European Commission study released this week shows green bond issuance globally has risen from US$2.6bn during 2012 to US$74.3bn in 2016 year-to-date, with European and Chinese entities making up the largest share of climate aligned credit issuers. The study identifies several key bottlenecks preventing the development of the industry, including lack of green projects that qualify for green bonds, lack of aggregation mechanisms for green projects, and lack of a green bonds definition framework.

The Reserve Bank of India (RBI) has proposed the opening of an Islamic window in all conventional banks, allowing them to introduce Sharia-compliant financial services including capital markets products like sukuk. The move could open up significant new markets for Indian banks.

RUSSIA, CIS & EUROPE

Italian Prime Minister Matteo Renzi announced his resignation on the back of a crushing defeat over his constitutional reform referendum this weekend, triggering renewed financial turbulence for Europe and sending the euro to 21-month lows.

Russian automaker Kamaz set first coupon rate for RUB5bn 15-year exchange bonds at 9.92%, the company said in a statement Friday. The technical placement of the bonds is scheduled for December 12, with Sberbank CIB and VTB Capital acting as chief organizers.

Japanese lenders Mizuho and SMBC are reportedly in talks to provide €800mn in loans to Gazprom, and are aiming to announce the deal just before a meeting between Japanese Prime Minister Shinzo Abe meets Russian President Vladimir Putin, according to Reuters. Gazprom has not shied away from international markets in recent months, issuing €1bn 7-year notes and a CFH500mn Eurobond in November.

Rosneft has confirmed plans to issue RUB600bn (US$9.42bn) in domestic bonds on Wednesday December 7, to be sold via open subscription. The issuance, organised by Gazprombank with Russian Regional Development Bank as bookrunner, is a part of a wider domestic bond RUB1.07tn programme that was approved last month.

S&P revised its outlook on Poland from negative to stable, with the sovereign's BBB+ credit rating affirmed. The revision reflects an easing of near-term concerns over a further weakening of key institutions, most importantly Poland's Central Bank, and the government's efforts to exert control over a number of key institutions in the country.

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