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The Daily Roundup

Dubai to raise US$3bn dual conventional and Islamic facility – Bahrain LNG closes US$741mn loan – Turkish DPM promises more help for FX-reliant corporates – Nigeria Government accidentally loses U$7.22bn – Brazil senate passes key spending cap – China buys into Sibur

Dec 14, 2016 // 6:16PM

MIDDLE EAST & TURKEY

Dubai is in the process of raising a US$3bn facility, which includes a US$2bn conventional tranche and a AED3.67bn (US$1bn) Islamic facility, to help finance the expansion of Al-Maktoum International Airport in advance of Expo 2020.

Bahrain LNG has secured a US$741mn 20-year facility from a range of regional and international lenders to finance the development of the Bahrain LNG Import Terminal and associated infrastructure. Apicorp, Standard Chartered Bank DIFC, Korea Development Bank, Ahli United Bank, Banco Santander, Crédit Agricole Corporate and Investment Bank, ING Bank, Natixis, and Société Général were mandated lead arrangers. Korea Trade Insurance Corporation (K-SURE) provided commercial and political risk cover for approximately 80% of the financing. Standard Chartered Bank, Apicorp and the Korea Development Bank also acted as lead arrangers.

Dubai-based real estate company Meydan Group is looking to close an AED600mn (US$163mn) syndicated loan by the end of next week, according to a report from Reuters. The facility, which will be used to finance the construction of a hotel, is being arranged by the Commercial Bank of Dubai.

Turkish Deputy Prime Minister Mehmet Simsek suggested the government would be willing to help companies manage foreign currency-denominated liabilities as the outlook for the lira continues to deteriorate. The government may also move to limit non-lira loans, which already account for just over half of the existing credit lines extended by the nation's lenders.

Turkish banks have been able to maintain access to credit in the wake of the coup attempt earlier this year. According to the Savings Deposit Insurance Fund, part of the Prime Ministry, Turkish banks have accessed US$7.55bn in syndicated loans since the July 15 coup attempt, with demand dominated by foreign banks.

Turkish assets will likely continue to underperform in 2017 as a beaten down currency and political volatility continue to hammer the economy, according to asset manager and financial advisor BBH. A new methodology used by Turkstat to measure GDP in Turkey has led to significant upward revisions. Using 2009 as a new base, the size of the economy last year was revised up by US$140bn to $862bn, and 2015 growth was revised up from 4% to 6.1%. The revisions improved upon the previously reported figures for 14 of the last 15 years, but the lack of any detailed breakdown has left many investors sceptical.

 

AFRICA

South African inflation accelerated to its highest level in nine months in November, boosted by increases in food and fuel prices. The inflation rate was 6.6%, up from 6.4% a month earlier, local statistics agency said on Wednesday.

Nigeria is to sell its first green bond in the first quarter of 2017, and could issue again before the year end, according to the country's Environment Minister Amina Mohammed. The sovereign aims to sell up to NGN20bn (US$63mn) in its inaugural green bond sale, the continent's first sovereign bond of this kind.

Nigeria's government has found unrecorded debts of NIN2.2tn (US$7.22bn) left over from the previous administration, which turned up after an audit aimed which aimed at improving transparency. The debts were owed to contractors, oil marketers, exporters and electricity distribution companies, Finance Minister Kemi Adeosun said on Sunday in a statement.

Nigeria cut its 2017 growth forecast by half a percentage point amid the ongoing economic slump, the Budget and National Planning Minister Udo Udoma said. West Africa’s largest economy will probably grow by 2.5% compared with an earlier projection of 3% Udoma said, citing economic recession as the chief cause of the revision.

 

AMERICAS

Brazil's senate approved a constitutional amendment that would cap public sector spending in line with inflation for the next 20 years, a victory for President Michel Temer. Analysts say the move will likely be followed by deeply unpopular reforms to the country's pension system.

Fitch has downgraded Chile’s rating outlook from Stable to Negative due to rising sovereign debt and an economic slowdown.

Fitch Ratings has affirmed Venezuela's Banesco Banco Universal, C.A.'s (BBU) foreign and local currency Issuer Default Ratings (IDRs) at 'CCC', citing no material improvement in the bank's or country's condition.

Chile's Central Bank left its monetary policy rate at 3.5% but shifted to an easing bias from neutral by saying that it "will be necessary to boost the monetary impulse" if recent economic trends persist. Minutes from the bank's board meeting in November showed the board considered cutting its rate by 25bp, but ultimately decided unanimously to maintain the rate.

 

RUSSIA, CIS & EUROPE

China's Silk Road Fund has reportedly acquired a 10% stake in Russia’s largest gas processing and petrochemicals company, Sibur, according to TASS. Some reports suggest that the China Development Bank may have also participated with the acquisition. The move will undoubtedly deepen ties between the two nations.

Rosneft, the Russian oil giant recently part-privatized in a deal with QIF and Glencore, is in talks with Russian conglomerate Sistema about purchasing its oil subsidiary Targin. Sistema, owned by Russian businessman Vladimir Yevtushenkov, had 72% of shares in oil company Bashneft, which was seized by Russian government in 2014 amid allegations of money laundering; Yevtushenkov was briefly incarcerated. Bashneft was bought last October by Rosneft, which in recent months conducted a series of high-profile acquisitions, including an oil field in Egypt and a stake in India’s Essar Oil.

Ukraine announced the discovery of a massive natural gas field with reserves of about 40 billion cbm in the Black Sea shelf, said the Head of the State Service of Geology and Mineral Resources of Ukraine, Nikolai Boyarkin, in a press conference. The deposit is located in the offshore oil field with area of ​​7,000 sq km in the north-western Black Sea shelf of the country.

 

ASIA

HSBC has launched a US$290mn special lending facility aimed at start-ups in China's Pearl River Delta.

China is to impose penalties on an as yet unnamed US auto manufacturers for what it considers to be anti-competitive behaviour, according to the China Daily. The move comes shortly after Donald Trump ruffled China's feathers by speaking with Taiwan's president, violating the long-held "one-China" policy.

Lending growth in India has declined 1.3% in the wake of the demonitisation move two weeks ago, according to India Ratings & Research. Loan growth declined by INR65,000 crore from November 11 to November 25, according to the ratings agency. Inflation in India dropped to its lowest level in two years in November as the government’s surprise move to withdraw high-value bank notes prompted households to hold back on spending. Consumer prices for the 12 months to November rose 3.6%, well below the 3.9% market forecast and down from the 4.2% in October. It is also the weakest pace recorded since November 2014.

Exports from the world’s second-largest copper mine in Indonesia are under threat as a government ban on overseas concentrate shipments is scheduled to come into force from the middle of January 2017. The rules as they currently stand only permit shipments of refined metal after January 11, with ministers currently in discussions to revise the regulation.

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