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The Daily Roundup

KIPCO prices benchmark bond – Dubai in the market for fresh credit – Turkey sets final guidance on re-tap – AfDB supports Kenyan agricultural development programme – Nigeria Eurobond 8X oversubscribed – Realty SA in restructuring talks – Argentina’s Province of La Rioja prices US$200mn bond – China to strengthen anti-money laundering measures – RBI eases access on Masala bonds

Feb 17, 2017 // 7:12PM

MIDDLE EAST & TURKEY

Kuwait's KIPCO this week issued US$500mn in notes maturing 2027. The bond priced at par to yield 4.5%. Citigroup, HSBC, JP Morgan, and KAMCO managed the sale.

The emirate of Dubai is expected to issue fresh dollar denominated debt before the end of the first quarter, according to Reuters. According to the news agency, the size of the notes is likely to be larger than benchmark - or greater than US$500mn. The emirate has an upcoming US$600mn maturity in May this year.

Asset growth in the GCC banking sector lost momentum last year and overall loan growth is expected to decline further in 2017, Standard & Poor’s said in a recent report. Loan growth trended at 5% in 2016, half the rate seen the year before, due in large part to spending cuts.

The Republic of Turkey has set the yield on a tap of its March 2027 bonds at 5.65%, about 20bp tighter than when they originally priced earlier this year, and is expected to price as early as Monday. BNP Paribas, JP Morgan and MUFG are leading the sale.

AFRICA

The Bank of Ghana said the yield on its 91-day bills being sold in a regular weekly auction on Friday rose to 15.9621%, up slightly from 15.6877% seen at auctions the previous week.

Bank of Zimbabwe governor John Mangudya has introduced a US$70mn exchange stabilisation facility to be disbursed by the end of February 2017 in a bid to manage current delays in the processing of outgoing payment. The move comes as the country continues to struggle from dwindling foreign exchange reserves.

The African Development Bank has agreed to lend Kenya KES350mn (approx US$35mn) to support an agricultural integration programme run by the Intergovernmental Authority on Development (Igad), which is participated by seven other African countries and aims to stimulate the use of tehcnologies in the agricultural sector.

South African antitrust authorities said they won´t fine Citigroup Inc. and Barclays Plc for colluding to manipulate the value of the rand because they co-operated with regulators, Bloomberg reported. While they may not yet have full indemnity, their disclosures to the Competition Commission could save them from being penalised if the information they provided is proven accurate. The reports come just one day after the country's competition commission wrapped 12 banks for colluding to fix the USD/ZAR exchange rates by manipulating money markets.

Nigeria's Minister for Budget and National Planning, Udoma Udo Udoma, has said the country will not take the World Bank up on its offer to lend it up to US$2.5bn until the 2017 budget is approved. Meanwhile, African Development Bank (AfDB) is holding back the second US$400mn tranche of a US$1bn loan  until it can secure a reform plan from the government.

Nigeria's US$1bn Eurobond issuance was oversubscribed by over 8X, according to a note from the London Stock Exchange. The 15-year bond offering 7.875% started trading Thursday.

Nigeria's Central Bank sold NGN178.44bn (US$586.01mn) in 321-day treasury bills at 18.6% and NGN19.14bn of 174-day paper at 18% at an auction on Friday, it said. It also debited a number of bond buyers, leading to a more than doubling of the overnight lending rate.

AMERICAS

Brazil is reportedly preparing legislation to fast-track the concession of smaller infrastructure projects as it looks to step up efforts to kick-start the economy, according to local press reports. The legislation, which is expected in July, also aims to increase the participation of private companies in a broad range of sectors including mining and logistics.

Brazilian homebuilder Realty SA is considering surrendering buildings and land given as collateral to creditors ahead of a potential in-court reorganization, according to Reuters. The cash-strapped company is currently negotiating a restructuring plan with creditors. The company is one of a number of real estate firms struggling with project overruns and delays and eventually led to take up debt reorganisation measures.

Brazil's economy showed signs of cooling off this week. The country's economic activity index decreased 1.82% year on year, more than analysts were anticipating.

Argentina's La Rioja Province tapped the international capital markets this week with a US$200mn sale of notes maturing 2025. The notes were priced at 98.834% to yield 9.865%, and carry a coupon of 9.75%. UBS was the sole bookrunner on the trade.

Mexico and Vietnam have agreed to speed up negotiations on a trade and customs agreement, and to strengthen tax avoidance efforts, according to a statement from Vietnamese Deputy Minister of Finance Đỗ Hoàng Anh Tuấn and Mexican Minister of Finance and Public Credit Jose Antonio Meabe. The move comes as Mexico continues to shore up its international partners in order to counter growing isolationist sympathies.

Fitch maintained Panama's sovereign ratings at 'BBB' with a stable outlook. Panama´s rating is supported by continued robust and stable macroeconomic performance, which has driven a sustained rise in per-capita income and reflects policies and a strategic location. Fitch also estimates the country´s growth for the next year would remain above 5%, one of the highest rates among 'BBB' credits in the region.

ASIA

China will strengthen anti-money laundering supervision activities and improve mechanisms to prevent money laundering for the second time in less than three months, the Central Bank announced. The country added new rules on cross-border capital flows in December as part of what it said were measures to prevent money laundering.

Malaysia's Digi.Com has secured approval for an MYR5bn (approx. US$1.12bn) sukuk programme, with proceeds of forthcoming issuances put towards the company's working capital and a 4G infrastructure rollout. The company also said it hopes to diversify its investor base.

The Reserve Bank of India (RBI) has allowed multilateral and regional financial institutions to invest in Masala bonds, according to a notification on its website. "In order to provide more choices of investors to Indian entities issuing rupee denominated bonds abroad, it has been decided to also permit multilateral and regional financial institutions where India is a member country, to invest in these rupee denominated bonds," the Central Bank said.

Mongolia plans to nationalise a 49% stake in the Erdenet copper mine, which was sold by Rostec to Mongolian Copper Corp (MCC) last year. One of Asia's biggest copper producers, the mine produces 530,000 tons of ore annually.

Indonesia’s Central Bank kept its benchmark seven-day repo rate at 4.75% this week. The bank is keeping rates steady after six consecutive cuts last year.

RUSSIA, CIS & EUROPE

Russia's Severstal issued a US$500mn benchmark-sized bond this week. The notes maturing 2021 priced at par to yield 3.85%. Citigroup, ING Wholesale Banking London, JP Morgan, and Societe Generale managed the trade.

Russia's TCS Group told banks it would cancel a secondary public offering this week. The company was initially targeting to yield up to US$70mn from the sale of ordinary shares. No reason has been given for the cancellation.

Croatia's Agrokor is considering divesting some of its biggest assets as it seeks to shore up investor confidence before restructuring its debt, according to a report from Bloomberg. The company could divest up to 80% of its stake in water bottler Jamnica.

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