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The Daily Roundup

DIB mulls capital-boosting sukuk – Saudi Aramco market cap could exceed US$1tn – Qatar Reinsurance launches US$450mn perpetual – Nigeria to restructure BOA – Morocco CB approves Islamic finance changes – Argentina’s Santa Cruz in the market for dollar bond – Raghsa to raise US$150mn – China sets new growth targets – GHIAL sat to issue fresh INR bonds – PIK Group finalises RUB bond

Mar 6, 2017 // 6:36PM

Middle East & Turkey

Bahrain’s government treasury bill sale saw a subscription rate of 278%. The bills carried a maturity date of 91 days and paid an interest rate of 2.22 %, with the average price for the issue was 99.4% and the lowest accepted price 99.4%. 

Abu Dhabi Islamic Bank is said to be in the market for a capital-boosting sukuk, according to a report from Reuters. Observers should take the report with a pinch of salt – the bank’s press department denied reports it is currently looking to issue new Islamic instruments.

Fund managers surveyed by EFG Hermes expect Saudi Aramco to be valued at US$1-1.5tn when it publicly issues shares for the first time next year. The Saudi Aramco IPO is one of the most hotly anticipated public offerings in emerging markets globally, and is expected to be the largest globally to date.

S&P lowered the outlook on Qatar’s national debt to ‘negative’ due to concerns the country’s external debt will outpace liquid asset growth.

Qatar Reinsurance has launched a US$450mn Tier II perpetual bond at a yield of 4.95%, according to Reuters. IPTs for the 5.5-year notes were in the range of 5.5%.

Saudi Arabia's Commission for Tourism and National Heritage has set up a fund to support projects in the hospitality and services sectors. The department has set aside SAR397mn (approx. US$105mn) to support projects to be qualified by the Commission and the Ministry of Finance. The fund is part of the government’s strategy to promote and develop the tourism sector in Saudi Arabia.

Lending at one of Egypt’s largest financial institutions increased dramatically over the past year. Banque Misr saw its loan portfolio increase by EGP63.8bn to reach EGP127.9bn during 2015/2016 fiscal year, compared with EGP 63.8bn in the previous fiscal year.

The UK has agreed to arrange a GBP10bn financing package for Iraq, according to a Reuters report. The two countries signed an MoU at the weekend that will see the UK extent loans over the next ten years for projects in a wide range of sectors including water, sewage, electricity, healthcare and transport.

Africa

Nigeria is to restructure Bank of Agriculture (BOA) in a bid to encourage greater participation in the country’s agriculture sector, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, announced this week. The Minister said the BOA will be restructured in a way that extends the reach of the bank and reduce yields for borrowers.

Morocco's Central Bank has approved the use of five types of Islamic banking transactions (murabaha, musharaka, ijara, mudaraba and salam) in a move aimed at stimulating the Islamic finance sector in the country. The move comes just months before the country’s debut sukuk transaction, which is expected to launch sometime in the first half of 2017.

Americas

Argentina’s province of Santa Cruz is considering a US$350mn bond sale in the upcoming months. The southern province, which is led by Alicia Kirchner, the sister of former president Nestor Kirchner, will be the fifth local government to tap the international markets this year alone.

S&P downgraded the long and short-term local and foreign currency credit rating of Barbados from ‘B-‘ to ‘CCC’, and shifted its outlook on the sovereign to negative. The rating agency cited increased debt and overreliance on the central bank as reasons for the move.

Argentine real estate developer Raghsa is looking to raise up to US$150mn through the sale of notes due 2024 with coupons of between 7.25-7.5%. It also plans to offer 2021 (8.5%) note holders the option to swap for the new notes, according to a note from Moody’s.

Asia

The Chinese government has set the growth target at 6.5% for 2017, Bloomberg reported. The objective was outlined in Premier Li Keqiang’s work report to the National People’s Congress in Beijing and is similar to last year’s target range of- 6.5% -7%. Senior members of government who have been working to steady economic growth have shifted to a more neutral policy with the aim of reducing the financial risk of excessive borrowing.

China’s Bank of Guiyang plans to issue up to CNY5bn (approx. US$725mn) in preference shares this month, the bank said in a statement.

Chinese retail appliance maker GOME Electrical Appliances Holding raised US$400mn from the international capital markets this week. The bonds priced at par to yield 5%. The sale was managed by Barclays.

GMR Hyderabad International Airport Ltd (GHIAL) is looking to issue up to US$300mn in fresh Eurobonds this month, according to new data from Deal Street Asia. Proceeds from the sale, which is being managed by Citi and Bank of America Merrill Lynch, will go towards refinancing existing maturities.

Vietnamese steelmaker Hoa Phat has secured a VND10tn (approx. US$439mn) loan to finance the development of a steel complex in the Quang Ngai Province. The project is expected to be completed in 2019.

Russia, CIS and Europe

Russia is expected to put in 0.6% growth in the first quarter of this year, which will rise to 0.8% in Q2, new forecasts from the country’s Central Bank show. The CBR is using Urals at US$50 per barrel as its base for the estimates, up from a base case of US$48 per barrel.

PIK Group announced it has completed a RUB13bn issuance late last week. The 5-year series BO-P01 notes pay a coupon of 13%. The sale was arranged by BCS GM, Expobank, and SME Bank.

Rising risk in Europe is starting to weigh on the negative yielding assets on the continent, according to a research note from Fitch. Outstanding negative yielding sovereign debt to US$8.6tn as of March 1 from US$9.1tn near year-end 2016. “The total of negative-yielding sovereign debt with remaining maturities of greater than seven years fell significantly to $0.5 trillion as of Mar. 1 from over $2.6 trillion on June 27 2016. Only Japan, Germany, Denmark and Switzerland have debt issues carrying a negative yield with more than seven years until maturity, compared to 10 countries as of June,” the agency said in a note.

Croatian food retailer Agrokor is said to be in talks with Sberbank for a EUR300mn loan according to Bloomberg.

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Bonds & Loans
April / June 2020

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