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The Daily Roundup

Moody’s: Brazilian corporates see outlook improve – ADCB prices formosa trade – Commercial Bank of Qatar in talks over bond offering – Moody’s cuts Turkey outlook – Kenya signs US$800mn syndi loan – Nigeria Central Bank to sell currency forwards – Global Bank Corp re-taps 2021s – BCI hits the loan market – Sritex issues 7NC4 bond – China Evergrande Group raises US$1.5bn in international markets – Russian outlook revised to positive by S&P – Magnit could buy out Agrokor

Mar 20, 2017 // 6:35PM

 

Middle East & Turkey

Abu Dhabi's NMC Health Plc is looking to tap the bond market to help fuel future acquisitions, according to a report from Bloomberg. The healthcare provider is looking to expand its reach in key markets including Saudi Arabia, Oman, and Qatar.

Abu Dhabi Commercial Bank (ADCB) took the opportunity to take advantage of a quiet period in the Taiwanese market to launch a US$230mn formosa bond. The five-year notes constituted the second formosa bond the bank has sold this quarter.

Commercial Bank of Qatar is said to be in talks with banks on a potential international bond offering, according to local press reports. The bank could look to issue a US dollar denominated benchmark bond. The bank last hit the markets in June last year, when it sold a US$750mn 5-year conventional bond.

Borrowing rates look set to rise in the GCC after a number of the region's central banks look set to follow the US Federal Reserve in hiking interest rates. Just one day after the Fed raised its benchmark interest rate by 25bp the UAE Central Bank followed suit, leaving the door open for others to follow when they meet later this month and early next.

Aster DM Healthcare is in talks with banks to change the terms of an AED600mn (approx. US$163mn) syndicated loan due to difficulties associated with repayment, according multiple reports and sources. The loan was signed one year ago.

Moody's cut its outlook on Turkey to 'negative' citing material risks to the country's credit profile, including the tense political environment and flagging confidence in the country's political institutions. "The tense domestic political environment following last July's failed coup has persisted for longer than expected, a situation that the referendum on April 16 to centralize executive powers within the presidency is unlikely to alter given the large divide between the ruling Justice and Development (AK) Party and the opposition over the proposed constitutional changes. The actions taken to reduce various forms of opposition to the government since July last year have undermined the country's administrative capacity and damaged private sector confidence," the rating agency said.

 

Africa

Kenya has signed an US$800mn syndicated loan with four international lenders and the government has already drawn down the sum, a senior Treasury official said on Monday. President Uhuru Kenyatta last week dismissed criticism of the higher borrowing, saying it was funding development in the East African nation. In January, the Nairobi government picked Standard Chartered, Standard Bank, Citi and Rand Merchant Bank to lead the syndicated loan. Kenya has previously said it will raise KES150bn (US$1.46bn) from external commercial sources, partly to plug a fiscal deficit equal to 9.7% of GDP in its budget for the fiscal year to June 2017.

Nigeria’s Central Bank has urged further cooperation on fiscal and monetary policy in a bid to pull the country's economy out of recession, according to a CBN spokesperson. The comments come after a two-day retreat with members of the Monetary Policy Committee, which are due to decide on forthcoming rate movements this week. The country's benchmark interest rate is currently 14%.

Nigeria's Central Bank plans to offer US$100mn in currency forwards on Monday to be delivered within the next 60 days in order to boost dollar supply in the market, Reuters reported, quoting traders. The local currency was quoted at 307.50 to the dollar on the interbank market on Monday compared with 307 a dollar closed on Friday, while it was quoted at 445 on the black market, strengthening slightly over 450 last week.

The Democratic Republic of Congo warned that proposals by the Trump administration to rollback laws on the central African “conflict minerals” risks reigniting violence in the region. The suspension of Section 1502 of the Dodd-Frank Act “in the long run, will jeopardize the stability and security of the DRC” by encouraging an “escalation in the activities of non-state armed groups,” Mines Minister Martin Kabwelulu said in a letter to the Securities and Exchange Commission dated March 13, quoted by Bloomberg.

 

Americas

Panamanian lender Global Bank Corp has successfully re-tapped its senior US$550mn 2021 notes yielding 4.5%. The company sold US$150mn in 4-year notes, which were initially issued in October last year.

Mexican mining firm Minera Autlan successfully priced a MXN1.5bn (approx. US$75mn) bond last week, according to a prospectus seen by Bonds & Loans. Sale of the notes due 2022 was led by CI Banco, and part of a MXN2bn issuance programme authorised by the company.

Brazilian electricity producer AES Tietê Energia is readying the sale of new local market debentures, according to a note to regulators. The company plans to issue up to BRL1bn (approx. US$324mn) in 5-year notes in the local markets.

Brazilian Federal authorities have started search and seizure operations related to corruption in the country's meat packing industry. Officials have been relatively mum on the investigation into BRF SA and JBS SA, but they claim to have evidence companies bribed government officials as part of the export and sale of dodgy meat, according to local press reports.

Moody's revised its ratings outlook for a number of Brazilian corporates to 'stable' this week including Embraer, Telefonica Brasil, BRF and Electrobras, citing broad improvement in the domestic economy in Brazil.

Chilean bank BCI has taken commitments from 15 Asian lenders for a three-year US$125mn syndicated loan.

 

Asia

The Asian Development Bank issued GBP250mn (approx. US$310mn) in 5-year notes this week. The bank priced the notes maturing 2022 at 99.900% to yield 0.77%. Citi, Deutsche Bank and HSBC managed the trade.

The Indonesian government plans to issue a US dollar denominated sukuk in addition to eur and yen-denominated bonds in the first half of this year, according to Reuters citing the Finance Ministry. The country's Ministry of Finance plans to raise as much as US$5.5bn from global markets this year.

Indonesian textiles giant Sritex raised US$105mn in a 7NC4 bond yielding 7.375%. Proceeds from the sale will be used to redeem all of the company's outstanding 2019 notes.

Mongolia's Central Bank left its policy rate unchanged at 14%, saying the monetary policy outlook favours future changes to interest rates. The Bank of Mongolia (BOM) lowered its rate by 100bp in December following a sharp 450bp hike in August to help stabilize the exchange rate of the tugrik and preserve international reserves and thus financial stability. The Central Bank noted Mongolia's inflation rate rose to 2.1% in February from 1.9% in January and is expected to rise further but still remain low.

China Evergrande Group, one of the country's top homebuilders, raised US$1.5bn in a dual-tranche bond offering this week. The company sold US$1bn in notes maturing 2022 priced at part to yield 8.25%, and US$500mn in a shorter-dated 2020 tranche priced at par to yield 7%.  China Merchants Bank, Credit Suisse, and Haitong International securities were leads on the transaction.

Singapore-based textiles group Golden Legacy hit the international market this week, pricing a US$150mn 7-year bond at 99.317% to yield 7.12%. Citigroup, DBS Bank, and HSBC led the transaction.

 

Russia, CIS and Europe

Russian Central Bank Governor Elvira Nabiullina has urged the adoption of measures to address capital flow volatility following a meeting of G20 finance ministers and central bank heads.

Magnit, one of Russia's largest retailers, is said to be mulling the acquisition of Agrokor, a struggling Croatian food group, according to Slovenian press.

Russia’s Otkritie Financial Corporation Bank plans to collect bids for RUB10bn 6-year exchange bonds on Wednesday, with guidance for the first coupon rate set at 10.3–10.5% annually, which corresponds to a 10.56–10.77% annual yield to a 3-year buyback offer. The bank acts as the organizer for securities which will be offered under a RUB100bn exchange bond program, registered in March 2015.

S&P revised its outlook on Russia to 'positive' on the back of higher GDP growth expectations in the country, along with a broadly improved outlook on oil prices. The sovereign had its rating affirmed at 'BB+'.

Credit Bank of Moscow is planning to buyback about US$500mn in Eurobonds maturing 2018, the bank said in a statement this week. A number of banks including Citi, HSBC, ING and JP Morgan are mandated to lead the buyback. The results will be announced on March 29.

Ukraine's dollar-denominated bonds fell across the curve on Monday, with longer-dated maturities touching their lowest since early December, after the International Monetary Fund delayed a decision on disbursing more aid as the federal government launched a blockade of the Donbass territories, controlled by the pro-Russian forces. The 2026 and the 2027 bond lost more than 0.5 cents to trade just above 90 cents in the dollar before trimming their losses, according to Reuters, quoting Tradeweb. Five-year credit default swaps for Ukraine, which traders use to hedge against default risk, rose on Monday to 627.59bp, up from 620bp at Friday's close.

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Bonds & Loans
January / March 2020

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