MIDDLE EAST & TURKEY
Nogaholding, the investment and business development arm of Bahrain’s National Oil and Gas Authority (NOGA), has secured US$741mn in a 20-year structured credit transaction that will be used to develop LNG regasification terminal including a floating production system.
In a statement to the Qatar Exchange, Qatar National Bank has denied reports it is currently in talks with Chinese lenders over a syndicated loan worth up to US$1bn. "QNB Group announced that the news, which have been circulated in the media on assigning a Chinese bank to arrange a syndicated loan for QNB Group, are inaccurate news and based on old negotiations. The QNB Group noted that it will, as usual, inform investors about any significant news concerning the Group," the lender said.
Sukuk issuance in core markets like the GCC, Malaysia, Turkey and Pakistan rose 26% in 2016 and broadly maintained its share of capital markets funding despite large conventional bond issues by Saudi Arabia, Abu Dhabi and Qatar, according to a recent report from Fitch Ratings. New sukuk issuance with a maturity over 18 months from these markets rose to US$40bn in 2016 from about US$32bn a year earlier.
Kuwait has reportedly selected six banks to manage its international bond sale, which is expected sometime in the first quarter of this year according to Bloomberg. Citigroup, Deutsche Bank, JPMorgan, HSBC, NBK Capital, and Standard Chartered are said to be managing the bond sale.
Turkey has dismissed Zulfukar Sukru Kanberoglu, deputy head of the state fund TMSF, which runs companies seized by the state after the coup attempt in July last year, and shut down two local television stations. The move comes after a relative period of calm following a wave of dismissals amidst a post-coup attempt government crackdown in place since July.
The Central Bank of Turkey meets Tuesday and is expected to hike the benchmark repo rate between 25bp and 50bp to 8.50% in a bid to help stem rising inflation.
AFRICA
Nigeria's National Assembly has passed the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2017 – 2019 this week. The legislature also approved President Muhammadu Buhari’s borrowing plan of NGN2.3tn as part of the MTEF and FSP's passage.
Nigeria's interbank lending rate rose from 7% to close at 11.5% over the weekend as bond and treasury bill payments drained liquidity from the money market. The shift comes just days after Nigeria's DMO raised over NGN214mn (approx US$704mn) in the domestic market.
Gambia's Yahya Jammeh arrived at the airport in the capital Banjul on Saturday in the company of mediator Alpha Conde, the president of Guinea, after stepping down from power, Reuters reported this weekend. The move comes after global and West African powers applied significant pressure on the former president to recognise the results of the latest election, which saw opposition leader Adama Barrow emerge as victor.
The South African Reserve Bank meets Tuesday and is expected to keep rates steady at 7.0%, despite inflation accelerating to 6.8% year on year in December.
AMERICAS
Chilean port operator SAAM completed its first placement of bonds in the local market with UF2.8mn (US$111mn) in a bid to refinance short term liabilities. The company placed UF1.4mn in Series B notes maturing in 2021 and sold at a rate of 1.88% and a spread of 92bp over the reference rate, and UF1.4mn in Series C notes maturing in 2026 at a placement rate of 2.3% per year and a spread of 101bp over the reference rate, the company said in a press release. Santander Corredores de Bolsa and Credicorp Capital Corredores de Bolsa led the transactions.
Chile's state-owned railway operator Empresa de los Ferrocarriles del Estado (EFE) sold UF2.85mn (approx US$113mn) last week according to a notice sent to the country's securities and insurance regulator (SVS).
Chilean President Michelle Bachelet has signed into law a bill that gives state-owned Codelco US$975mn in fresh funding to help the company cope with recently passed "copper law", which compels the company to hand over up to 10% of its revenues to the armed forces. The tax burden on the company has grown significantly since the passage of the law.
The death of Justice Teori Zavascki, the lead Supreme Court prosecutor working on the Lava Jato ("car wash") corruption case in Brazil, is expected to delay the results of the investigation - but will not derail the landmark probe, which is expected to implicate up to 200 Brazilian politicians in an elaborate kick-back scheme involving some of the country's largest firms. Zavascki was killed in a plane crash last week, shortly before he was due to unveil testimony from executives at engineering group Odebrecht SA, one of the leading firms implicated in the kick-back scheme.
Aeropuertos Argentina 2000 is preparing an up to US$400m 10-year bond issue led by Morgan Stanley and Oppenheimer & Co. Part of the proceeds from the debt sale will be used to pay back existing debt.
Compania Latinoamericana de Infraestructura y Servicios (CLISA) is looking to re-tap about US$100mn of its existing 9.5% 2023s this month in a bid to take advantage of more aggressive pricing in the Latin American primary markets. The Argentine firm sought to raise up to US$300mn through the note sale last year, but fell short after struggling to secure enough demand.
AES Argentina is looking to market a cross-border US dollar trade which could launch as early as the end of the month. The Argentine power company has hired Credit Suisse, Itau BBA and JP Morgan to arrange a series of investor meetings.
Argentina priced US$7bn in 5 and 10-year bonds on Friday. The sovereign sold US$3.25bn in notes maturing in 2022 priced at 100% and carrying a coupon of 5.625%, and US$3.75bn in notes maturing 2027 priced at 100% and carrying a coupon of 6.875%. Banco Santander, Banco Bilbao (BBVA), Citigroup, Deutsche Bank, HSBC, and JP Morgan led the sale.
Brazil is to report December current account and FDI data Tuesday, with analysts expecting subdued import demand.
The Colombian Central Bank meets Friday and is expected to cut rates 25bp to 7.25%, with inflation falling to its lowest levels in over a year.
Venezuelan President Nicolas Maduro announced during his weekly broadcast Sunday that economist Ricardo Sanguino was nominated to replace Nelson Merentes as the country's Central Bank chief. The move comes as the embattled economy struggles to stem inflation in the face of depleted foreign exchange reserves and limited fiscal headroom.
RUSSIA, CIS & EUROPE
Khazak-based Halyk Bank and Kazkommertsbank have announced the two banks are in early stage talks over a potential merger.
ASIA
Asian issuers (excluding-Japan) sold US$12.3bn bonds last week ahead of Donald Trump’s inauguration, most since the week of Nov. 16, 2014 when nearly US$14bn, according to figures compiled by Schildershoven.
Chinese real estate developer Zhuhai Huafa Group sold US$200mn in bonds maturing 2020 on Friday. The bonds were priced at 99.944% and carry a coupon of 3.5%. CCB International, CITIC Securities International, DBS Bank, HSBC, Jiangsu Huajing Assets Management, and ICBC led the sale.
Hong Kong Airlines hit the market Friday with a US$250mn perpetual bond. The bonds were priced at 7.125% for the first three years, and will yield the 3-year US Treasury rate from January 2020. Bank of China, CCB International, Credit Suisse, Guotai Junan Securities, Hong Kong International Securities Limited, and Societe Generale led the sale.
China's preliminary fiscal deficit for 2016 was CNY2.83tn (approx US$413bn), exceeding the country's budget target of CNY2.18tn, according to figures from the Ministry of Finance and Reuters. The country also reported that VAT rose more than 30% in 2016, while business taxes fell by about 40%.
Singapore reports December CPI Monday. Analysts are expecting CPI to rise to 0.1% year on year, compared with 0.0% in November.
Taiwan is to report December IP Monday, which analysts are expecting to rise 8.0% year on year, compared with 8.8% in November.
Bilt Graphic Paper Products Ltd (BGPPL), a unit of Ballarpur Industries Ltd (BILT), is in talks with Deutsche Bank and Goldman Sachs to raise up to Rs400 crore (US$53mn) in a structured credit transaction, local news agencies reported.
