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The Daily Roundup

Turkish NPLs on the rise due to currency woes – Botas gets US$400mn from World Bank – Nigeria sets IPTs on Eurobond – Ecobank looks to increase customers by 10X – Venezuela mulls swap with Nomura – Province of BA hits the market with new bond, re-tap – Ant Financial looking for US$3bn – Sri Lanka to raise up to US$2.5bn this year – Rusal to issued fresh Panda bonds

Feb 9, 2017 // 6:47PM

MIDDLE EAST & TURKEY

According to S&P, NPLs in the Turkish banking system will increase to about 5.0% in 2017, with the currency's depreciation the main driver in play. The lira has lost nearly 10% against the US dollar since the beginning of the year.

Turkey's Botas has signed a new funding agreement with the World Bank for US$400mn, which will be used to finance the Trans-Anatolian Natural Gas Pipeline (TANAP) project. The pipeline will carry gas from Azerbaijan, through Turkey and into Europe.

AFRICA

The Federal Republic of Nigeria has set initial price thoughts for a US$1bn 15-year bullet bond at 8.50%. The bonds, due 2032, could launch as early as Friday. Citigroup and Standard Chartered are managing the sale.

The volume of non-performing loans (NPL) in the Nigerian banking sector is expected to rise to as high as NGN2.3tn for the fiscal year 2016, rising above 15% for the first time in decades, according to the National Bureau of Statistics. The new figure is substantially higher than the NGN1.75tn in NPLs the previous year. As at June 2016, NPLs averaged 11% in the country, according to the Central Bank of Nigeria (CBN).

Pan-African group Ecobank Transnational plans to increase its customers to 100 million by 2020 from 10 million, using technology to hit that goal, the chief executive said on Thursday. Speaking at the launch of the group's new mobile banking technology in Kenya, Ade Ayeyemi, told Reuters this would help the group reach more users in 33 African nations where it operates.

AMERICAS

Inflation in Brazil increased 5.35% year on year in January, the lowest level since September 2012 according to figures recently released by the Central Bank. The data also support a potential rate hike, with the Central Bank hoping to trim at least 300bp off the benchmark SELIC rate in 2017. It is currently being held at 13%.

According to Colombian prosecutors, the country’s current President Juan Manuel Santos may be involved the landmark Odebrecht corruption scandal. Investigators believe former lawmaker Otto Bula, one of Santos' key donors, received US$4.6mn from the company, and donated up to US$1mn to finance the president's election campaign.

Venezuela's Central Bank is said to be considering a repurchase agreement that would provide US$1bn from investment bank Nomura in exchange for bonds issued by state oil company PDVSA, Reuters reported. Under the agreement, Nomura would swap US$1bn in fresh capital for up to US$3bn in PDVSA notes maturing in 2022.

El Salvador is preparing to sell a US$550mn bond in March, according to Reuters. The sovereign is planning roadshows in New York and London in late February.

Moody's rating agency, which has put Mexico's credit on a negative perspective, on Monday said the Mexican government's debt rose more than expected last year and weak growth could further pressure policymakers this year. The report cited data from the country's Ministry of Finance, showing the federal government deficit increasing to 2.9% of GDP in 2016, up from 2.8% in 2015. The ratings service had expected fiscal consolidation and a deficit reduction to 2.5% of GDP for 2016, it said.

ContourGlobal Power Holdings, which owns and operates power infrastructure in Latin America, announced a €50mn re-tap of its €600mn senior unsecured notes due 2021. The tap carries a coupon of 5.125% and was sold at 105.75 to yield 3.676%. BNP Paribas, Credit Suisse, and Goldman Sachs managed the trade.

The Province of Buenos Aires launched its bond sale this week, pricing a new US$750m 2023 bond at 99.581% with a coupon of 6.5% to yield 6.60%, and a US$750mn re-tap of its 2027s, priced at 98.532; with a coupon of 7.875% to yield 8.10%.

Uruguay's Economy Ministry said it plans to sell up to US$2.05bn in bonds this year, up 25% from the year before, as the country looks to plug a record deficit.

ASIA

China's most valuable online finance company, Ant Financial, is in early stage talks with banks to raise between US$2bn to US$3bn in debt to fund acquisitions and foreign investments, Reuters reported, citing a source. Banks have made "soft pitches" to help the company raise funds, most likely through loans, to be used for acquisitions, as well as for boosting existing investments.

In India, a Vodafone - Idea Cellular merger will create an entity with revenue of around Rs80,000 crore, and will largely be credit-positive, according to India Ratings and Research. The rating agency says the move will likely reduce redundant infrastructure and create opportunities for new entrants.

Sri Lanka's Central Bank said it plans to raise up to US$2.5bn through an international bond issuance in a move aimed at boosting the country's foreign exchange reserves. The country's hopes to end 2017 with about US$7.5bn in reserves, the its Central Bank Governor Dr. Indrajit Coomaraswamy said this week.

RUSSIA, CIS & EUROPE

Russia’s Rusal, a leading global aluminium producer, announced that it has registered its prospectus for a Renminbi denominated bonds issuance (Panda bonds), totalling up to CHY10bn (US$1.5bn) with a tenor of 7 years. Rusal becomes the first overseas company with global operations outside of China that is seeking to offer bonds to investors within the Chinese debt market through this placement on the Shanghai Stock Exchange. The company is allegedly also mulling over a share sale. The board recently held discussion about selling up to a 20% stake, representing about US$1.7bn, in the London Stock Exchange, Bloomberg reported quoting sources.

The International Monetary Fund said on Thursday that it expects its board to consider the next loan disbursement to Ukraine in the coming weeks, once some remaining issues are resolved. IMF spokesman Gerry Rice told a news briefing that he expects the third review of Ukraine's US$17.5bn loan program to be presented to the IMF executive board along with the IMF's annual Article IV audit of Ukraine's economy.

The Republic of Latvia has started marketing a tap of its €605mn 0.375% bonds due 2026, and is looking to raise up to €500mn through a new 30-year issuance. IPTs on the 30-year issuance are likely to range in the MS+40bp area.

Bonds & Loans is a trusted provider of news, analysis, and commentary that helps illuminate the most significant issues, events and trends impacting the global emerging credit markets.

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