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The Daily Roundup

Salhia Real Estate signs new credit facility – Egypt secures US$61mn loan, extend borrowing to US$3bn in 2017 – Akbank inks dual-currency loan – Moody’s downgrades outlook on Turkish corporates – Cape Town to issue green bonds – Angola secures new funding from Chinese lenders – Argentina to limit provincial spending – Brazil tries to ease concerns around beef sector – China to align climate bond guidelines with international standards – Poland signals it could ease monetary policy later this year

Mar 23, 2017 // 1:12PM


Middle East & Turkey

Kuwait's Salhia Real Estate has signed a credit facility with a local bank for KWD5mn, according to a statement to the Boursa Kuwait.

Egypt has successfully secured a US$61mn loan to finance the development of a 50,000 m3/d seawater reverse osmosis desalination plant in Eastern Port Said. The loan, which was extended by the Kuwait Fund for Arab Economic Development, comes off the back of a KWD35mn agreement inked by the two countries in December 2016.

Egypt will look to borrow about US$9bn from international markets this year, Deputy Finance Minister Ahmed Kouchouk said this week, according to a report in Reuters. Of that, the country will look to raised up to US$3bn through the capital markets, with US$5-6bn coming from international lenders including multilaterals and development finance institutions.

The Islamic Development Bank (IDB) said this week it could look to raise as much as US$1.5bn through the sale of US dollar denominated sukuk next month. According to media reports the bank has mandated Emirates NBD, Goldman Sachs, Gulf International Bank, HSBC and Standard Chartered to manage the trade.

Qatar Investment Authority, the country's sovereign wealth fund, plans to transfer up to US$100bn of its domestic investment portfolio to the Ministry of Finance, according to a report in Bloomberg. The move is part of the sovereign's ongoing efforts to reform the fund and consolidate finances to help cut costs after persistently depressed oil prices weighed heavily on the economy.

UAE credit growth picked p 0.5% in February off the back of higher GRE spending, according to data from the country's Central Bank. GREs borrower 1.9% more in February after two consecutive months of contraction.

Qatar's fiscal deficit is projects to shrink to 5%of GDP this year, or US$8.7bn, according to figures recently released by the Qatar Central Bank, down from 8.2% of GDP in 2016. The data suggest the state's finances are improving after the country hit the capital markets for a whopping US$9bn last year.

Turkey has stalled a plan to sell around 600 companies worth about US$10bn that were confiscated after the failed military coup in 2016. According to Bloomberg, it has not been determined whether the Istanbul-based Savings Deposit Insurance Fund, (TMSF), will ever go ahead with the sales over the current legal battles regarding their ownership. The companies form part of the more than 850 firms taken by the government last year and which have assets that are estimated to be worth a combined US$13.2 billion. All of the companies were confiscated over for their alleged support of self-exiled cleric Fethullah Gulen.

Akbank has secured a US$1.2bn dual-currency loan from a syndicate of local and international lenders, the bank revealed this week. The loan was split between a 1-year US$219.5mn tranche, a EUR738.3mn 1-year tranche, and a US$285mn 2-year tranche.

Moody's revised down the outlook on a number of Turkish corporates this week following a similar move on the sovereign and the country's banks. Moody's changed the rating outlooks to negative from stable for Koc Holding, Coca-Cola Icecek A.S. and Turkcell Iletisim Hizmetleri A.S. Moody's also affirmed the Baa3 issuer rating of Anadolu Efes Biracilik ve Malt Sanayii A.S. with negative outlook, Ba1 rating of Turkiye Sise ve Cam Fabrikalari A.S. with stable outlook and Ba1 rating of Turkiye Petrol Rafinerileri A.S. (Tupras) with stable outlook.



Kenya has successfully launched the country's first mobile bond sales platform, where investors can purchase as little as KES3,000 (about US$30) in government bonds - compared to minimum bids of KES50,000 typically seen on government securities sales. Kenya's treasury hopes to raise as much as KES5bn (approx. US$47.7mn) from the bond sale.

The Kuwait Fund for Arab Economic Development has extended a TZS109bn loan to finance the Nyahua- Chanya road project in Tanzania, an 85 km stretch of highway the country says will help significantly expand commercial transportation through a critical corridor starting in Dar es Salaam city, and passing through to Kigoma to link Tanzania with other landlocked countries surrounding it.

The governor of Zimbabwe's Central Bank has said a new interest rate cap will apply to both new and existing credit facilities, according to a report in local press. "When you change the interest rate in the system, it means that you are changing interest rates for both the new and the old loans," Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya was quoted as saying by Bulawayo.

The African Development Bank (AFDB) is due to help Nigeria issue its debut sovereign green bond, the country's acting Minister of the Environment Ibrahim Usman Jibril said this week. The AFDB treasury has developed a set of guidelines that could serve as a template for the issuance, the bank's capital markets head Stella Kilonzo said this week.

The City of Cape Town in South Africa plans to issue up to ZAR1bn (approx. US$80mn) in climate-aligned notes this year, it announced. The bond, which was developed in line with the city's green bond framework, follows on from Johannesburg's successful placement of ZAR1.4bn in green bonds in 2014.

Nigeria’s Central Bank left its benchmark interest rate unchanged at 14% for a fourth consecutive meeting. Africa’s largest economy is currently struggling to lift the economy out of its worst slump in 25 years as they fight inflation that is almost double the government’s target.

Nigeria's Osun State has successfully secured a fresh US$65mn Islamic loan from the Islamic Development Bank (IDB), it revealed this week. Proceeds from the loan will be put to a number of projects including waste water treatment facilities and a new 17 km-long transmission line between Kajola and Ilesa.

Nigeria's upper house has approved a proposal to sell US$500mn in fresh Eurobonds to finance the 2017 budget, setting the scene for another bond sale - which could come as early as the second quarter of this year. The news follows from the country's successful US$1bn Eurobond sale in February.

Angola has signed a series of financing agreements with Chinese lenders this week. The agreements will see Export Import Bank of China provide US$65.3mn towards the National Geology plan (Planageo), a project to discover and exploit existing mineral resources, and a US$35.3mn agreement with the Development Bank of China to develop a training centre to support the Ministry of Energy and Water.



Argentina plans to pass legislation that would prevent provincial spending to rise faster than inflation, the country's Treasury announced this week. The move comes as the country's president Mauricio Macri looks to further trim the primary deficit, and as the provinces borrow record amounts from the international capital markets.

The European Investment Bank (EIB) and Mexican state-owned development bank Nacional Financiera (Nafin) are doubling down on sustainable financing with plans to jointly set up a credit line for green projects, the two organisations said this week, without specifying a total for the credit line. Nafin is one of the country's green bond pioneers, having issued both local and hard currency green bonds over the past two years.

The Brazilian Federal police and Agriculture Ministry issued a joint statement this week aimed at playing down the prospect of a systemic crisis following a raft of import restrictions imposed on Brazilian beef producers due to concerns over tainted meat. In another blow to the industry, American retailer Wal-Mart said it would halt the sale of beef products from the country.

Nafin priced its inaugural JPY10bn (approx. US$90mn) this week. The 5-year notes pay a coupon of 0.78% and yield MX+68pb.

Paraguay sold US$500mn in 10-year notes this week. The book on the notes were said to have reached as high as US$3.5bn, according to a DCM banker. The deal tightened by nearly 10bp from initial price thoughts of 4.8%.



China is set to realign its domestically developed green bond standards framework with international standards in a bid to further attract green investment, the country's Central Bank chief economist said this week. Ma Jun, the PBOC's chief economist, said China will need to attract over US$290bn in new sustainable investment annually over the next five years, but one of the barriers to doing so is a lack of consistent standards and disclosure rules.

Chinese lender China Zheshang Bank hit the market this week for a US$2.175bn perpetual bond. The notes were priced at par to yield 5.45%.  Bank ABC, Bank of Communications, BNP Paribas, Bank of China, CCB International, CICC, CITIC Securities International, CMB International Capital Corporation, Goldman Sachs, Haitong International securities, HSBC, SPDB International Holdings Limited, and Ping An Bank managed the trade.

Indonesia successfully raised US$1bn through the sale of a RegS sukuk this week. The Islamic bond due 2022 was priced at par to yield 3.4%, tighter than initial guidance of 3.7%. Bahana Securities and Trimegah Securities managed the trade.

Philippine’s Central Bank kept the overnight reverse repurchase rate at 3% a record low, even after inflation accelerated at the fastest pace in more than two years in February. The economy also grew 6.5% in 2016, which may be an indication that the rise in rates will just be a matter of time.

Singaporean agri-food company Japfa Comfeed will look to place a new 5-year US dollar denominated bond this week, according to banking sources. The 5NC3 transaction is expected to price in the 5.875% area.


Russia, CIS and Europe

According to Russia’s Central Bank, direct foreign investment surged to US$8.3bn during last year, more than the US$5.9bn reported for 2015. The country is becoming a refuge for investors amid economic and political uncertainty in Europe. It is relatively small sovereign debt to GDP ratio and large gold and foreign currency reserves, have enabled the country to retain the interest of investors.

Russia reaffirmed plans to sell OFZ bonds to households and other retail investors in April this year, the Finance Ministry said this week. The rouble-denominated bonds, which can't be traded but can be sold back to the banks that issue them, are intended to help stimulate savings.

Eugeniusz Gatnar, an official at the Central Bank of Poland signalled this week the Bank could lift rates this year, the first time since 2012. He said this month that with growth estimated to top 3.5% in 2017, up from 2.7% last year, inflation could rise and pave the way for further tightening.


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