MIDDLE EAST & TURKEY
Kuwait Fund for Arab Economic Development (KFAED) has signed a KD8mn (US$27mn) loan agreement with the Democratic Republic of Georgia to help finance the development of the Batumi Akhaltsikhe road, a US$40mn transportation project aimed at relieving congestion and improving access in the country's mountainous region.
Turkey’s ruling Justice and Development Party (AKP) and President Recep Tayyip Erdoğan appear confident about securing the 330 votes or 2/3 majority needed to pass key constitutional reforms that will concentrate further power in the hands of the executive, thanks to support from the far-right Nationalist Movement Party (MHP). If achieved, Turks might go to a referendum on the reform as early as April 2.
Turkey’s Central Bank is considering whether it can use currency swaps to intervene in the market and support the lira without depleting its FX reserves, officials said this week. The move comes as the currency continues to fluctuate, weakening to TRY3.78 per US dollar.
Saudi Binladin Group (SBG) is said to be negotiating a two-year extension on a SAR10bn (around US$2.7bn) Islamic loan used to pay for the construction of the kingdom's Grand Mosque in Mecca after the project encountered numerous delays. This is the second delay being sought by the troubled real estate developer, after seeking repayment delays on a commercial loan worth US$217mn in July last year.
Africa Finance Corporation (AFC) issued US$150mn in 3-year notes at 6M LIBOR+200bp. The deal was managed by Emirates NBD, FirstRand, and Mitsubishi UFJ Financial Group. Sources have not confirmed how the deal will affect the bank's plans to issue its maiden sukuk, which is rumoured to be in the works.
Egypt plans to issue a follow-up sukuk after hitting the market with its first dollar bond in several years. Reports suggest the sovereign could raise up to US$2.5bn in international markets through a conventional bond issuance.
South Africa's Treasury sold a total of ZAR2.35bn (approximately US$174mn) worth of its 2035, 2040 and 2044 instruments on Tuesday, with yields dropping slightly from previous auctions according to data from Reuters.
Kenya has mandated Standard Chartered, Standard Bank, Citigroup and Rand Merchant Bank for a loan of up to US$1bn, according to reports from Bloomberg. The government will look to borrow up to US$1.5bn from international markets to finance the budget deficit in 2017, but will likely need to hit the market again in order to refinance a US$750mn syndicated loan due in October this year. The country is currently seeking about US$800mn from commercial banks, and about US$700mn from multilaterals and DFIs.
Nigeria is said to be struggling to secure up to US$4bn from international lenders including multilaterals and DFIs because it has failed to implement necessary structural reforms, reports in local Nigerian newspapers suggest. The government has not submitted a formal reform plan to the IMF, leading concerns over the sovereign's ability to attract global investors.
Uganda has concluded talks with the European Union, the French Development Agency and the Africa Development Bank (AfDB) on them jointly financing US$400mn of a planned US$1.1bn expressway, a senior government official said on Wednesday. The three will provide the US$400mn in a mix of grants and credit, said Patrick Muleme, head of design at state-run Uganda National Roads Authority (UNRA).
Gambian President Yahya Jammeh has declared a 90-day state of emergency a day before his official mandate ends. He decried "extraordinary" foreign interference in his country's affairs and December's election. Regional leaders have been unsuccessfully trying to persuade Mr Jammeh to hand over power to Adama Barrow, who won the polls.
Spain's Elecnor SA has been awarded a US$117.2mn contract to build the 115-MWp Santiago Solar plant in Chile. The US$120mn project is being financed by Credit Agricole, DNB Bank and SMBC through commercial loans with the project's lead developers, Andean Mining & Energy and EDF EN Chile Holding.
A group of creditors is challenging restructuring arrangements being proposed for Brazilian telecoms operator Oi because they argue it unfairly favours shareholders and penalises bondholders, preventing them from weighing in on key decisions like asset sales.
Brazil's state-controlled oil company Petrobras on Tuesday closed a US$4bn issuance of 5 and 10-year notes in international markets as part of the debt-laden company's efforts to term out upcoming maturities, it said in a statement. The bonds were priced at 6.5% on the five-year and 7.37% on the 10. The order book was five and four times oversubscribed in the 5 year and 10-year tranche, respectively, with 592 investors from the United States, Europe, Asia and Latin America participating, the statement noted.
Brazilian finance companies face continued weak growth at levels lower that in recent years, according to a new Fitch Ratings report. The report said financial delinquencies have risen dramatically over the past two years, weakening growth prospects for the country's banks and non-bank financial institutions and slowing loan growth to 0.3% in the last quarter of 2016 - down from 1.5% during the same period the previous year.
Argentina's largest electricity provider Pampa Energia made its bond debut this week, selling a US$750mn 10NC5 bond at a yield of 7.625%, about 50bp inside IPTs. Citi and Deutsche Bank were joint bookrunners on the deal, with Credit Agricole and Santander co-managing.
Colombian glass company Tecnoglass has reportedly revived investor talks ahead of a proposed dollar bond said to range between US$200mn and US$250mn after delaying the issuance late last year.
Development bank Corporacion Andina de Fomento (CAF) has mandated BNP Paribas, Citi and HSBC for a euro-denominated bond that could price by the end of the month.
Mexico announced it will offer holders of undeclared capital abroad tax incentives to bring it home in an attempted to lure some US$10bn in investment and protected itself against shocks of the incoming Trump administration. The 8% the government is offering is way below, Mexico's top income tax rate of 35% and must be paid within 15 days after the money is transferred.
Venezuela’s president Nicolas Maduro is seeking new will look to call a meeting between oil producing nations in the first quarter this year in a bid to agree to new measures aimed at supporting the price of oil. The country's economy has been hit hard by persistently low oil prices, and needs oil to rise beyond the US$60 per barrel mark before material improvement can be expected.
China Development Bank issued €400mn in new 7-year bonds at a yield of 0.875% and sold at 98.698%. The bond was arranged by Barclays, BNP Paribas, Bank of China, CCB International, Commerzbank, Deutsche Bank, HSBC, ICBC, ING Wholesale Banking London, and Mizuho Financial Group.
Bank of Communications has secured approval from China's Central Bank to issue up to RMB20bn in Tier 2 bonds.
China Huarong Asset Management (AMC) subsidiary Huarong Ruitong Equity Investment Management Co., the country's largest distressed debt manager, plans to raise CNY50bn (US$7.30bn) for debt-for-equity swap deals.
Taiwanese technology firms are issuing at the lowest yields seen yet. RAM manufacturer Nanya Technology issued US$500mn in 5-year bonds at a coupon of 0%. DBS Bank, UBS, and Yuanta Securities managed the trade. Another Taiwanese technology developer, Ennoconn, raised US$200mn in notes maturing in 2022 at a coupon of 0%. The deal was sole-led by KGI Securities.
FWD Group, the insurance arm of Asian private investment group Pacific Century Group, raised US$250mn in 5 -year notes at a yield of 5YUST+440.8bp. BNP Paribas, HSBC, and Standard Chartered
The State Bank of India (SBI) hit the dollar market this week to raise US$500mn in senior unsecured 5-year notes, which pay a coupon of 3.25%. The trade was managed by Bank of America Merrill Lynch, BNP Paribas, Citigroup, DBS Bank, HSBC, Mitsubishi UFJ Financial Group, and SBI Holdings. The deal is part of the bank's US$10bn MTN programme, of which it has raised about US$3.5bn.
India's cabinet on Wednesday approved a plan to divest a quarter of its stake in five state-owned insurers.
RUSSIA, CIS & EUROPE
Romania plans to borrow up to €3bn in international markets this year, the country's Minister of Finance said.
Slovenia issued €1bn in 10-year Eurobonds this week. The sovereign issued at MS +63bp at a yield of 1.326%, slightly tighter than IPTs. The sovereign also tapped €300mn of its 2045s. Barclays, Credit Agricole CIB, HSBC and UniCredit managed the trade. The sales generated a combined orderbook of €2.45bn from 197 accounts, the country's Ministry of Finance said prepared remarks.
Moldova could scrap its trade agreement with the EU in favour of a rival Russia-led economic bloc, the country’s president said in Moscow on Tuesday. The announcement by Igor Dodon, who took office in December after beating his pro-European rival at the polls, will be seen as a strategic victory by the Kremlin, which has been working to draw the former Soviet states back under its sphere of influence. However, Dodon stopped short of accepting Crimea as part of Russia, commenting only that it was a “delicate” issue that needs to be addressed carefully.
Russian state oil producer Rosneft said Western sanctions had prevented it from building up its stake in Italian refiner Saras, forcing it to sell the stake two years after buying it. After purchasing 2013 to buy a 21% stake in Saras in 2013, the company two years later sold 9% of the stake and this week sold its remaining 12%. The price was 1.53 euros per share, raising 175 million euros (US$187mn), Rosneft said in a statement on Wednesday.
EBRD issued international bonds for RUR1.75bn maturing in 2023 with a 6% coupon. Bonds were sold at a price of 97% with an initial yield of 6.56%, with JP Morgan as Bookrunner.