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The Daily Roundup

Damac mandates lead arrangers for new deal – Kuwait prices through Abu Dhabi, Qatar curves – Saudi Arabia hires global coordinators for dollar sukuk – Qatar Re sees 14X oversubscription on perpetual – Nigeria DMO launches savings bond – Congo raises growth forecast – Bolivia launches US$1bn bond – Cemig to issue US$600mn in May – Chinese economy shows shoots of green – Evraz prices US$750mn trade

Mar 14, 2017 // 6:55PM

 

Middle East & Turkey

Damac Properties has reportedly mandated lead arrangers to help the UAE property developer sell fresh bonds in a bid to refinance existing maturities coming due this month and a US$650mn bond due 2019, Reuters reported. Earlier this month it was reported that the company was in talks with a number of banks over a possible benchmark sized issuance.

Kuwait priced through the curves of both Abu Dhabi and Qatar when it sold US$8bn in dual tranche bonds Monday evening. The sovereign sold US$3.5bn in notes maturing 2022 priced at 99.366% to yield 20.89%, and a US$4.5bn 10-year tranche priced at 99.026% to yield 3.63%. Citigroup, Deutsche Bank, HSBC, JP Morgan, NBK Capital, and Standard Chartered Bank were bookrunners on the trade. The sovereign received over US$24bn in bids for the notes.

Dubai-based retail real estate developer Majid Al Futtaim closed a US$1bn revolving credit facility, according to a report in Reuters. Towards the end of the month the company set initial price thoughts for a US$1bn bond managed by Barclays, Emirates NBD Capital, Goldman Sachs, HSBC, National Bank of Abu Dhabi, and Standard Chartered Bank. It is unclear whether the company opted to hit the loan market instead of issuing the bonds.

Saudi Arabia has reportedly hired Citigroup, JPMorgan, and HSBC to coordinate the sovereign’s upcoming sukuk sale, according to a report in Bloomberg. The sovereign is looking to plug a US$54bn hole in the country's budget with proceeds from the sukuk.

The Kangan Oil project, a refinery complex in southwest Iran, has just received a €3.1bn boost from Hyundai Engineering. The South Korean firm has agreed to put the investment, provided by Export-Import Bank of Korea and the Korea Trade Insurance, towards the development of the second phase of the project. Construction on the second phase of the project is supposed to take up to four years.

Fitch upgraded Iraq's credit rating outlook from 'negative' to 'stable' after the country's fiscal standing improved substantially. Iraw's deficit reportedly narrowed to IQD16.5tn or 8.1% of GDP in 2016, from 12.3% of GDP in 2015, while the IMF programme the country secured in July last year has further boldered the sovereign's access to funding and its broader reform efforts.

Qatar Reinsurance Company Limited, a subsidiary of Qatar Insurance Company S.A.Q., has issued US$450mn Reg S Perpetual non-call 5.5% subordinated Tier 2 notes guaranteed on a subordinated basis by QIC to institutional investors, representing its debut issuance in the international debt capital markets. The issue attracted over 290 orders of more than US$6.5bn and achieved a balanced global distribution of investors comprising 30% Asia, 29% UK, 20% Middle East, 19% Continental Europe and 2% from other regions. The initial coupon has been set at 4.95%.

 

Africa

Nigeria’s Debt Management Office (DMO) has launched a 2-year savings bond aimed at retail investors in a bid to broaden the country's investment base. The DMO is looking to offer investors a maximum subscription of NGN50mn at a fixed coupon of 13.01%, with the sale concluding March 17.

The Reserve Bank of Zimbabwe has confirmed that about US$100mn of the country's 'bond notes', which trade on par with the US dollar, are currently in circulation. The controversial notes were introduced as a way for the Central Bank to tackle inflation, which has skyrocketed out of control over the past few years. They are backed by a US$200mn facility provided by AfreximBank.

Congo's Central Bank raised its growth forecast for 2017 to 4.9% on Monday, up from an earlier estimate of 2.9% owing to a more bullish outlook for commodity prices. The figure was nearly double the 2.5% Congo achieved in 2016. In a news conference, Congo Central Bank Governor Mutombo Nyembo said international prices of raw materials were looking more favourable.

 

Americas

Bolivia this week took the opportunity to launch a US$1bn bonds maturing in 2028. The notes carry a coupon of 4.5% and were priced at 99.104% to yield 4.61%. Bank of America Merrill Lynch and JP Morgan led the sale.

Brazil's Cemig is likely to issue up to US$600mn in the international capital markets later this year, potentially in May, according to a disclosure seen by Bonds & Loans. The company also said that any potential privatisation initiatives being assessed by the company shouldn't have an impact on the transaction.

Hermes Pardini SA, a laboratory services provider, is prepping a BRL210mn in non-convertible debentures, according to a filing made with Brazil's capital markets regulator. The notes will have a maturity of 5-years.

 

Asia

Chinese industrial output notched upwards to 6.3% year on year in February, up from 6% the year before. Fixed asset investment picked up to 8.9% growth from 8.1%, but retail sales slowed to 9.5% from 10.4%, according to a new batch of data released by the Chinese government.

Moody's ratings agency assigned a Baa3 rating to Indonesia's US dollar sukuk offering, while Fitch rated the issuance BBB-.

Green bond issuance globally is likely to more than double to US$206bn this year, up from 93bn in 2016, according to Moody's. The credit rating agency expects issuance volumes to be led by China, which last year accounted for over one third of total issuances.

 

Russia, CIS and Europe

Evraz issued a US$750mn 6-year bond in the international capital markets this week. The notes were priced at par and tightened slightly from initial price thoughts to yield 5.375%. Citigroup, Deutsche Bank, Gazprombank, JP Morgan, and VTB Capital managed the sale, which generated over US$2bn in bids.

Croatia hit the international markets this week to price a €1.25bn trade. The notes maturing 2027 were priced at 98.32% to yield 3.22%. Citigroup, HSBC, Morgan Stanley, and UniCredit were mandated leads on the sale.

Serbia's Central Bank maintained its key policy rate at 4.0%, saying it expects inflation to remain within its tolerance range in coming months. The National Bank of Serbia (NBS), which lowered its rate by 50bp in 2016, added that international developments still mandate caution as monetary policies of leading central banks are likely to diverge further by the end of the year, increasing the uncertainty of global capital flows.

 

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