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The Daily Roundup

Fitch continues with Turkish downgrades – Nigeria’s Forte Oil issues in local currency – Ghana to miss growth targets – Sigma Alimentos prices first euro trade of the year from LatAm – Argentina, Province of BA to hit the market soon – Alfa-bank looks set to issue rouble bonds – US removes some sanctions against FSB – China tweaks repo rates

Feb 3, 2017 // 6:25PM

MIDDLE EAST & TURKEY

The Turkish government has temporarily removed special consumption tax on some white-goods products until the end of April, a move aimed at easing consumption costs. The move could help boost Beko and Vestel Group's eurobonds.

Fitch downgraded the credit ratings of 18 Turkish banks this week, following the sovereign downgrade last week. The move had little impact on their bonds as the downgrade was already broadly priced into the market.

AFRICA

Nigeria's Forte Oil raised NGN9bn (about US$30mn) in 5-year notes priced at par and carrying a coupon of 17.5%. The bonds were placed as part of the company's NGN50bn bond programme as the company looks to expand its operations throughout West Africa.

Ghana will miss 2016 targets on growth, fiscal deficit reduction, and its primary balance, but is committed to restoring fiscal discipline and eliminating over-expenditure, Finance Minister Ken Ofori-Atta said Friday. The new government is also committed to a three-year US$918mn International Monetary Fund programme aimed at restoring fiscal balance and promoting growth, Ofori-Atta told reporters.

AMERICAS

Brazilian railroad operator Rumo priced its US$750mn 10NC4 bond to yield 7.375%, tighter than IPTs - which were in the 7.5% region. BB Securities, Bradesco, BTG Pactual, Itau, Morgan Stanley and Santander managed the sale.

In a recently published Moody's report, the credit rating agency said Mexico corporates dependent on consumption spending could get hit by rising fuel prices – companies like Televisa, Telmex, Elektra, and Empresas ICA.

Mexico's Sigma Alimentos became the first Mexican corporate to hit the international capital markets this week when it priced a €600mn trade maturing in 2024 and paying a coupon of 2.625%. The notes were priced at 99.628% to yield 2.68%. BNP Paribas, JP Morgan, Mitsubishi UFJ Financial Group, and Rabobank managed the sale.

Argentina will issue between US$1.5bn and US$2bn in Swiss franc bonds this year in possibly two or three separate three issuances, Finance Minister Luis Caputo said. The first issuance is slated for the first quarter, Caputo said, speaking with a group of foreign correspondents in Buenos Aires, adding that the issuances will each be around US$500mn and US$750mn each.

Argentina's Province of Buenos Aires is set to begin roadshowing a possible benchmark-sized dollar bond. It last issued in the dollar market in June 2016.

Banco Supervielle joined Argentina's borrowing spree, placing ARS4.7bn in 3-year notes on the international markets this week at BADLARPP+450bp. Banco Supervielle, Banco Santander, and Credit Suisse managed the trade.

Uruguay will sell US$2.05bn in debt this year, up from US$1.7bn in 2016, the Economy Ministry said in a report.  The country aims to balance its books after posting its sharpest fiscal deficit in years.

ASIA

India's markets regulator SEBI proposed developing a mechanism to encourage consolidation in corporate bonds, particularly for the private placement of debt securities, in a bid to enhance both primary and secondary market liquidity. The regulator is petitioning market stakeholders and will develop a consultation paper due to be published in the next few months.

China’s Central Bank raised the interest rates it charges in open-market operations and on funds lent via its Standing Lending Facility as it shifts to reining in asset prices and inflation. The People’s Bank of China increased the costs of seven-, 14- and 28-day reverse repurchase agreements by 10bp each to 2.35%, 2.5% and 2.65% respectively. The bank injected CHY638.68bn (US$92.98bn) via short- and medium-term liquidity tools in January, down 26% from the previous month, data showed on Friday, signalling an effort to cool down rapid credit growth. The reduced injections coincided with the Central Bank's move to push up some lending rates, in a further sign that it is moving to monetary policy tightening as the economy stabilises. The People's Bank of China (PBOC) said in a statement on its website that it lent CHY551bn to financial institutions via its medium-term lending facility (MLF) in January.

Kasikornbank (Kbank) has extended Bt3bn (US$83mn) in a syndicated loan to the Power State Enterprise of Lao. The funds will be used to further develop the region's power network, which is linked up with those of a number of neighbouring countries.

RUSSIA, CIS & EUROPE

US Treasury Department's Office of Foreign Assets Control has amended existing sanctions against Russia to "authorize certain transactions" with Russia's Federal Security Service, the FSB. The new authorisation will allow US companies to pay up to $5,000 per year to the FSB to secure licenses to export IT products into the country, a process managed by the security agency.

Alfa-bank plans to place RUB-denominated Reg. S-only Eurobonds this month. The bank mandated JP Morgan and Alfa-bank to arrange a series of meetings with fixed-income investors which will start on 7 February.

Mechel’s Board of Directors approved a bond programme worth RUB100bn, the company disclosed on this week. The move isn't likely to materialise a deal anytime soon, however. Mechel is currently restricted to issue debt due to restructuring agreements with State banks.

The Russian government could substantially reduce its stakes in a number of majority-owned entities including VTB, SovComFlot, and ALROSA, in line with its divestment plans. The government recently revealed it plans to yield upwards of RUB17bn from asset divestments.

Ukraine is preparing for a showdown with the International Monetary Fund over a pension revamp that’s needed to maintain disbursements from the country’s US$17.5bn bailout. The international lender is demanding that Ukraine raises the retirement age by 2027, to 63 from 62 for men and 60 for women, to alleviate losses at the state pension fund, but the government wants the thresholds to remain unchanged, instead seeking to widen the pool of contributors to eliminate the deficit -- UAH145bn (US$5.4bn) last year -- by 2024, he said.

The Bank Assets Management Company (DUTB), also unfortunately known as Slovenia's ‘bad bank’, said it has repaid early €168mn (about US$181.4mn) of a syndicated loan owed to several of the country's financial institutions. The lender still reportedly owes up to €187mn to the country's lenders.

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