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The Daily Roundup

Sharjah Islamic Bank plans convertible sukuk – Golden Group plans OMR200mn issue – CBN Governor hits out at monetary policy critics – Lagos State to raise fresh debt – CTEEP raises BRL300mn – Algar Telecom preps local debt offering – Gol gets upgrade from Fitch – India lets FPIs invest in unlisted bonds – Singapore could allow local currency covered bonds – Evraz out with price talk – Gazprom hits the road

Mar 13, 2017 // 6:33PM

 

Middle East & Turkey

Sharjah Islamic Bank plans to issue new convertible sukuk equal to about 10% of the bank's capital, it said this week. Proceeds from the sale will be used to fund specific initiatives set out by the emirate's government.

Omani conglomerate Golden Group plans to raise up to OMR200mn through the sale of sukuk this year, according a prospectus submitted to the country's capital markets regulator. The company, which operates in a diverse range of sectors, could issue the bonds as early as April pending approval from the CMA.

Bank Muscat's Meethaq plans to issue the first tranche of its recently established OMR100mn sukuk programme this month, according to the Times of Oman. Meethaq, the Islamic banking window of Bank Muscat, could raise as much as OMR30mn through the sukuk sale.

 

Africa

The governor of the Central Bank of Nigeria defended hard currency curbs that have created singificant US dollar shortages. The country has banned over 700 goods from being imported into the country in a bid to help mitigate hard currency shortages. "This policy needs to be supported not just in response to the pressure on the naira but as an opportunity to change the economy's structure, resuscitate local manufacturing and expand job creation for our citizens," Godwin Emefiele said, as quoted in the Vanguard newspaper Sunday. Emefiele also took a shot at critics of the country's decision not to commit to a full free-float of the naira, something investors often identify as a source of worry around the struggling economy.

Lagos State Government plans to raise about NGN100bn (approx. US$317mn) through the sale of fresh bonds to support its proposed Bus Reform Initiative (BRI), the state's governor said this week. The bonds will carry a tenor of between seven and ten years.

Kenya's National Treasury cabinet secretary Henry Rotich is currently in China drumming up lender support for the country's Naivasha-Kisumu-Malaba railway project. Chinese lenders have already financed a number of rail projects in the country, including the 495km Mombasa-Nairobi line, which is being backed by a US$2bn loan from the Chinese government and a US$1.6bn concessional loan from a handful of Chinese banks.

 

Americas

Companhia de Transmissão de Energia Elétrica Paulista (CTEEP), which is owned by Latin American infrastructure developer ISA, is prepping a BRL300mn (approx US$95mn) local debenture. The trade is being managed by Banco Santander Brasil SA.

Algar Telecom SA is looking to issue up to BRL320mn (approx. US$102mn) in local market debentures this month, according to a note to regulators. The sale is being managed by Banco Itau BBA SA.

Colombian power distribution company Codensa sold COP430mn on Friday, the company announced. Proceeds from the issuance, which was split between a two and five-year tranche, will be used to refinance existing liabilities.

Brazilian power utility Cia Energética de Minas Gerais SA (Cemig) is said to be considering divesting two of its units, Cemig GT and Cemig D, in a bid to reduce its debt at the holco level, possibly in advance of those subsidiaries going public, according to Reuters. The sale could net Cemig up to BRL1.3bn.

Brazil's Investment Partnerships Program has added 55 new projects to the concessions pipeline worth more than US$14bn in estimated investments. New development are expected to include port terminals, transmission lines, railroads and highways and are expected to require more than BRL45bn (US$14.2bn) in total investments, the PPI said in a statement. auction will take place in the first half of 2017.

Puerto Rico presented a revised fiscal plan estimating US$900mn in new revenues in the next fiscal year, and another US$850mn in spending cuts to the US territory's federally appointed financial oversight board.  The Fiscal Agency and Financial Advisory Authority (AAFAF) board is required to approve a turnaround plan for the US Commonwealth island which is working to restructure some US$70bn in debt.

In a surprise move, Fitch upgraded Gol's credit rating from 'CCC' to 'CC'. Despite still sitting below investment grade, the move is a sign that cashflows are improving at the troubled Brazilian airline, while asset sales helped minimise some of the company's debt.

Signatories of the Trans-Pacific Partnership will meet in Chile next week to discuss the creation of an alternate Asia-Pacific free-trading framework backed by China. The parternship, which likely won't include the US, will complement existing regional arrangements including the Pacific Alliance, which includes Chile, Colombia, Mexico, and Peru, and the Regional Comprehensive Economic Partnership, a China-led agreement participated mainly by South East Asian countries.

 

Asia

A loosening of restrictions in India allowing foreign portfolio investors to invest in unlisted bonds could prompt a massive inflow of capital into the Indian bond market, a recently published Deloitte report suggests. SEBI, India's capital markets regulator made the amendment to the country's capital market rules last week. “In addition to enhancing the eligible investment basket for investment by FPIs, the above amendment would open up an efficient funding alternative for Indian companies without the need of getting the bonds and NCDs listed on stock exchanges," the report's authors wrote.

Indian lender Aditya Birla Housing Finance plans to raise up to Rs500 crore in non-convertible debentures alongside Rs200 crore in fresh subordinated debt, according to a note from India Ratings.

Singapore could enable covered bond issuances denominated in local currency as its Central Bank mulls allowing the use of covered bonds in repo transactions and lifting the encumbrance limit on the pool of assets that can be used for covered bond issuances, according to IFR.

 

Russia, CIS and Europe

Russian Finance Minister Anton Siluanov on Monday announced a series of new proposals that the ministry hopes will help to plug budget gaps and drive growth this year. Among those is a suggestion to scrap Russia's oil export duty, currently the largest single tax item for Russian oil producers, over three years 2022-2025. The move could reduce Russia's state budget revenues from oil and gas taxes would by 1% of GD, but would also help avoid higher expenditure commitments. The Ministry also confirmed plans, circulated in the press last year, to bring the mandatory social security payments rate and the value-added tax to the same level at 22%, which, according to Siluanov, is a way to avoid tax hikes, but could also spark a one-off 2% increase in consumer inflation.

Russian gas giant Gazprom kicked off investor meetings today ahead of a potential bond placement. The sale, which is being led by Gazprombank, JP Morgan, Mizuho and SMBC, will likely raise up to US$1bn.

Steel miner Evraz Group S.A. plans to issue fresh 6-year notes this week. The company is likely to issue benchmark size notes, with the interest rate being fixed at 5.5%. Citi, Deutsche Bank, Gazprombank, JP Morgan, and VTB Capital are arranging the sale.

Tighter standards on mortgage lending in Slovakia are credit positive for banks, as they should protect asset quality and restrict excessive loan growth, Fitch Ratings says. According to the ratings agency, loan growth is expected to slow to about 7% this year, from 10% in 2016, when loan growth to the non-financial sector was one of the fastest in the EU. The government hopes the new rules, which take effect this month, should also improve financial stability.

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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