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The Daily Roundup

Egypt secures funding package from Germany – Lebanon hires banks for dollar bond – Akbank seeks permission for covered bonds – Kenya growth slows – Zimbabwe mulls infrastructure bond – Brazilian issuers flock to market post-Carnival – Mexico boosts oil and gas auction ambitions – Clearstream, China MoU on clearing interbank bond trades for foreign investors – Tatfondbank loses banking license

Mar 3, 2017 // 5:21PM

Middle East & Turkey

Egypt secured a US$500mn funding package from Germany to support small and medium sized businesses and the country's economic reform programme through a series of grants and concessional loans, Egypt's Ministry of Investment and International Cooperation said in a statement Friday.

Lebanon has reportedly hired Barclays, Byblos Bank, JP Morgan, and Societe Generale de Banque au Liban (SGBL) to manage the country's upcoming international bond sale, according to Reuters. The sovereign is said to be looking to raise up to US$1.5bn in advance of March maturities. It most recently tapped the market in April 2016, when it issued a dual-tranche US$1bn bond.

The Sultanate of Oman issued a massive US$5bn triple tranche bond this week, more than double what analysts were anticipating. The sovereign sold US$1bn in notes maturing in 2022, US$2bn in notes maturing 2027, and US$2bn in notes maturing in 2047. The five-year tranche was launched at MS+190bp, the 10-year at MS+300bp, and the 30-year at MS+387.5bp. Bank Muscat, Citigroup, Deutsche Bank, HSBC, ICBC, JP Morgan, Societe Generale, and Standard Chartered Bank managed the sale.

Oman Shipping Company closed a US$227mn loan to finance the purchase of 10 new medium-capacity tanker ships. Societe Generale acted as sole arranger and underwriter on the deal, which also included participation from ABN Amro, Credit Agricole Corporate & Investment Bank, and the Korea Development Bank. Seven of the 10 vessels were covered by Korea’s export credit agency, K-SURE.

Turkey's Akbank has applied to the Capital Markets Board of Turkey and the Banking Regulation and Supervision Agency (BRSA) to issue up to €1bn in fresh covered bonds. In February, the lender announced it would issue mortgage-backed covered bonds outside Turkey in 2017.

Africa

Markit Stanbic Bank Kenya Purchasing Managers' Index (PMI) dropped to 50.1 in February, down from 52 in January as the market continues to show signs of a slowdown. "The ongoing drought and decline in private sector credit access will inevitably lead to deterioration in business conditions within the Kenyan private sector. This month’s historic low reading is symptomatic of these risks," said Jibran Qureishi, Regional Economist E.A at Stanbic Bank in a report accompanying the figures.

The government of Zimbabwe is looking to raise US$2bn through the issuance of an infrastructure bond, with the proceeds going towards the development of lecture halls, staff and student accommodation for the country's colleges and universities. Zimbabwe-based conglomerate CBZ Holdings is advising the Ministry of Education on the issuance.

India's Exim Bank has extended a government-backed credit line of US$23.5mn to the government of the Republic of Malawi, which will be used to finance the construction a new water supply system in the country, according to a circular from the Reserve Bank of India. The agreement, originally signed in August last year, kicked into effect at the end of February.

Americas

Brazilian homebuilder MRV Engenharia e Participações is looking to raise BRL750mn through a triple tranche debenture: BRL172mn in Series 1 notes at DI+1.5%; BRL497.2mn in Series 2 notes at DI+2.3%; and BRL80mn in Series 3 notes  at a fixed 8.2502%.

A Centrovias – Sistemas Rodoviários S.A. will tap the local market through the issuance of BRL100mn in simple non-convertible debentures. Banco BTG Pactual is arranging the sale, according to a filing with the country's capital markets regulator.

Brazilian highway concession operator Autovias S.A. will hit the local market for BRL100mn in simple, non-convertible debentures maturing September 2018. The sale is being managed by Banco BTG Pactual

Brazilian food processing company Marfrig announced a tender offer this week to buy back its existing 2018 and 2020 dollar bonds. The company said it could repurchase up to US$282mn of its 8.375% 2018s and US$485mn of its 9.5% 2020s.  BB Securities Limited, Banco Bradesco BBI S.A., HSBC Securities, Morgan Stanley, and Santander Investment Securities are managing the exchange.

Brazilian lender Banco Daycoval has secured a US$250mn funding package from the IFC, which will allow the bank to boost its lending to the country's SMEs. The package includes a US$63mn 5-year loan and a dual-currency 2-year loan, including an US$80mn tranche and a €55mn tranche. The package also includes another US$47.7mn granted through the IFC Managed Co-Lending Portfolio Program.

The Mexican government plans to auction 591 oil and gas blocks between 2017 and 2019, according to analysts at Schildershoven Finance. That includes 509 deep-water, shallow-water and onshore conventional and unconventional exploration blocks, up from 333 as previously forecast.

Asia

China's Caixin China General Services PMI is showing stronger business activity and growth in February, with the index rising from January's low of 52.2 to 52.6. "The uptick in the headline index was supported by faster growth in Chinese manufacturing production during February. That said, the rate of output expansion was moderate overall, and weaker than those seen in the final quarter of last year," Markit said.

Chinese investment and brokerage house Industrial Securities issued the first tranche of a planned subordinated bond issuance, according to local press reports. The company issued CNY2.5bn in bonds maturing 2019.

China Central Depository and Clearing Company (CCDC), the country's sole securities depository, and Clearstream have inked an MoU that will see Clearstream support settlement and custody for trades executed by foreign investors in the Chinese interbank bond market. The organisations said the move will boost foreign access to China's interbank bond market.

China Re Asset Management tapped the international markets for a US$800mn bond due 2022. The notes were priced at 99.381% to yield 3.52%. Bank of China, CCB International, China Everbright Bank, China Galaxy International Securities, China Merchants Bank, and HSBC managed the sale.

Logistics infrastructure developer China South City issued US$300mn in notes maturing in 2020. The notes carry a coupon of 5.75% and priced at 98.986%.  AMTD Asset Management Limited, Bank of America Merrill Lynch, Citigroup, Credit Suisse, Guotai Junan Securities, HSBC, Nomura International, and UBS managed the trade.

Asian property manager Pacific Century Premium Developments issued US$500mn in fresh bonds maturing 2022. The notes were priced at par to yield 4.75%. China Everbright Bank, HSBC, JP Morgan, and Morgan Stanley managed the sale.

Singapore-based food supplier Olam International raised US$300mn from international markets this week. The notes maturing in 2023 were sold at a price of 99.37% to yield 4.51%. Credit Suisse, DBS Bank, HSBC, and Standard Chartered Bank led the sale.

Chinese property developer Beijing Properties raised US$300mn in bonds due 2020. The notes were priced at 99.307% to yield 4.62%. Credit Suisse, DBS Bank, and Guotai Junan Securities managed the trade.

China Everbright Bank Co sold US$500mn in international markets this week. The notes due 2020 were priced at 99.67% to yield 2.62%. Agricultural Bank of China, Bank of China, China Merchants Bank, Haitong International securities, ICBC, Scotiabank, and Shanghai Pudong Development Bank managed the sale.

In a state visit this week, Saudi Arabia pledged US$1bn in fresh investment for Indonesia, with both countries signing a number of bilateral agreements to boost trade. Among some of the deals announced during the state visit included plans for a US$6bn joint venture between Saudi Aramco and Indonesian oil giant Pertamina.

Credit growth in India continues to slow from highs seen in September 2016, according to Prabhudas Lilladher, an Indian brokerage. Indian credit growth expanded just 3.5% year on year, compare with 4.5% the month before. Indian non-food credit growth hit a six-month high in September, reaching over 10% year on year. "We believe loan growth will be slower than anticipated at 5‐6% YoY in FY17 as banks re‐adjust from de‐monetization effects in retail & services segment, while lower project capex & UDAY repayments will keep industrial segment offtake under pressure," the brokerage said in its report.

Indian lender Punjab National Bank has raised Rs1,500 crore (approx. US$225mn) in Basel III compliant Tier 1 securities this week. The bonds were place Friday and pay a semi-annual coupon of 8.95%, the bank said in a statement.

Russia, CIS and Europe

Gazprom will soon reveal its plans to finance the ambitious and troubled Nord Stream 2 project, a 1,200km pipeline that will bring gas from Russia's north west into northern Europe, the company's deputy chairman Alexander Medvedev said this week. The pipeline, which has been delayed multiple times due to regulatory challenges and disagreements about how the project's owners will split the cost, is said to carry a price tag of up to US$11bn.

Just days after Tatfondbank's former deputy chairman was arrested on fraud charges, the Central Bank of Russia announced it has revoked the bank's license. The troubled lender sent proposals to investors last month detailing a bailout plan after it reported the bank was struggling with liquidity challenges, while several of its senior executives along with its former deputy chairman were embroiled in a scandal involving billions of roubles being siphoned out of the bank's deposits.

Russia's Finance Minister Anton Siluanov said the ministry is saving foreign currencies in a bid to meet existing non-rouble liabilities, local press reports suggest. Earlier this week the Minister said the budget deficit is likely to be below 3% of GDP and reach as low as 2% of GDP.

The Czech National Bank reaffirmed its plans to remove its cap on the koruna as early as mid-2017, a move that would likely lead to the currency's steep appreciation against the euro - prompting investors to pile into the koruna in anticipation.

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