MIDDLE EAST & TURKEY
Kuwait's Warba Bank has secured approval from the country's capital markets regulator to issue an up to US$250mn Tier 1 capital boosting sukuk, according to a statement from the bank.
Turkish President Recep Tayyip Erdogan has renewed calls for the country's Central Bank to shift its policy direction and reduce interest rates despite sever inflation setting in. The lira tumbled to as low as 3.9 per US dollar in early morning trading on Friday.
A Nigerian court has ordered the temporary forfeiture of assets and the transfer of operations of a long-disputed oilfield owned by Shell and Eni, among others, to the federal government, court papers released on this week showed. The court orders will last until Nigeria's anti-corruption agency concludes an investigation into how the current owners acquired oil prospecting licence (OPL) 245, the papers said. This is the latest of many inquiries, including by Dutch and Italian authorities, into the 2011 purchase of the OPL 245 block which could hold up to 9.23 billion barrels of oil, according to industry figures.
Nigeria's Central Bank said those who oppose the country's exchange rate policy are 'unpatriotic' after coming under intense pressure for partially pegging the exchange rate to the dollar despite upward pressure on inflation. The naira was pegged at NGN305 per US dollar despite netting about NGN500 per US dollar on the black market.
Nigeria's Ogun State has secured approval to seek up to NGN65.7bn (approx. US$215mn) in fresh loans from domestic and international banks. The loan is seen as critical for funding the 2017 budget.
Tunisia will hit the road to market a €1bn Eurobond in February after a two-year absence from the international capital markets. It will also look to borrow an additional €2bn from international markets later in the year. Sources suggest pricing could range as low as 5% to 6%.
Kenya's Central Bank has cancelled the sale of about KES30bn (approx US$289mn) in 15-year treasury bonds. So far the bank has remained quiet on reasons for the auction cancellation. This is the first time the country's Central Bank has cancelled such an auction in over three years.
The Peruvian government is said to be pressuring Odebrecht to divest from all of its assets in the country over corruption concerns and the company's ability to attract funding. The company recently divested from a partly built natural gas pipeline, the Gasoducto Sur Peruano Pipeline (GSP) project.
Brazil's top monetary policy body, the National Monetary Council, has this week approved restrictions to revolving credit lines offered by credit card companies, a move aimed at reducing interest rates for consumers. Consumer were previously restricted from using high-cost RCLs that automatically refinance bills that are not paid on time; the new rules, which come into force in early April, allow consumers to pay down those lines of credit in instalments.
Brazilian railroad operator Rumo Logística is to start fixed income investor meetings next week as it looks to market a possible US dollar bond. BB Securities, Bradesco, BTG Pactual, Itau, Morgan Stanley and Santander are managing the sale.
Brazilian police have launched a new set of operations linked to its landmark corruption investigation. Prosecutors issued 9 preventative arrest orders and 22 search orders linked to Eike Batista, one of Brazil's richest business tycoons, who is notoriously cozy with the country's political elite.
Chile's Central Bank cut the lending rate by 25bp to 3.25%. The decision comes after inflation dropped below target. The Central Bank is looking at a number of measures aimed at jump-starting economic growth.
Credit ratings agency S&P lowered its outlook on Chile to 'negative' from 'stable' this week, citing lower than expected economic growth. The move was unfortunately timed, with the sovereign recently announcing it plans to sell CLP9bn in bonds on the local market.
Mexico is becoming an increasingly risky buy, market indicators suggest, with issuances from the country noticeably subdued amidst a swelling Latin American pipeline. Mexico's 5-year CDSs, an effective proxy for country risk, are trading around 167bp; by comparison, Russia's 5-year CDSs are trading at 182bp - despite its lower sovereign credit rating. The growing rift between Mexico and the US seems to be at the heart of this, with US President Donald Trump this week signing an executive order mandating the construction of a border wall between the two countries, and signalling a potential 20% import tax on all imports from Mexico into the US - which would be used to fund the infrastructure project. The move could spark a trade war.
Argentine power company AES Argentina Generacion issued US$300mn in the international capital markets this week. The 7NC4 bond was priced at par and carries a coupon of 7.75%, on the tight end of the IPT range, and generated US$1.6bn in orders from investors. Credit Suisse, Itau Unibanco Holdings, and JP Morgan managed the sale.
Argentina's Province of Entre Rios is hitting the road again to market a possible US dollar bond to international investors.
Moody's has downgraded credit rating of Indian telecom operator Reliance Communications 'B1' to 'B2' with a negative outlook, citing overleverage and cashflow generation concerns. The company is currently in the midst of a significant restructuring, which has also affected its outlook.
About US$208bn worth of labelled green bonds are expected to be issued in 2017, a massive increase from US$93.4bn in 2016, according to a recently published Moody’s report. China is expected to be a huge driver of supply, with upwards of US$33bn expected from the country's issuers - largely driven by the country's bid to reduce pollution and strengthen its commitment to clean energy.
RUSSIA, CIS & EUROPE
The Russian Central Bank is expected to keep rates steady at 10% at its next policy meeting on Friday February 3, with inflation looking relatively subdued. The Central Bank Governor Ksenia Yudaeva said the macroeconomic environment has been fairly resilient in Russia despite some of the market volatility cause by Brexit and the election of Donald Trump in the US.
Russia's Russal Capital this week priced a US$600mn Eurobond maturing in 2022. The notes were sold at par and carry a coupon of 5.125%. Citigroup, Credit Agricole CIB, Credit Suisse, Gazprombank, ING Wholesale Banking London, JP Morgan, RBI Group, Renaissance Capital, Sberbank CIB, Societe Generale, UBS, UniCredit, and VTB Capital managed the trade.