Metalloinvest kicks off new deal pipeline; Ziraat, Rusal, and Phosagro expected to price

By Colin Hanner

Chicago, April 25 – The new deal pipeline continued to grow in emerging markets on Tuesday, market sources said, with Russia’s JSC Holding Co. Metalloinvest the first to price ahead of several others for the week.

The Moscow-based mining and metallurgy company priced $800 million 4.85% seven-year notes at par on Tuesday, a market source said.

The notes were issued via subsidiary Metalloinvest Finance DAC.

The notes priced on top of price talk, which was tightened from initial talk of 5% to 5¼%, a market source said.

Demand for the deal was in excess of $1.6 billion, a market source said.

The new issue is part of a refinancing that includes a cash tender offer for any and all of the company’s $1 billion of 5 5/8% notes due 2020.

Credit Suisse (Europe) Securities Ltd., Sberbank CIB, VTB Capital plc and Societe Generale are global coordinators and bookrunners for the deal, and ING Bank NV, London Branch and Merrill Lynch International are joint lead managers and bookrunners.

Benchmark deal for Ziraat

Turkiye Cumhuriyeti Ziraat Bankasy AS is expected to sell a benchmark offering of dollar-denominated five-year notes, a market source said.

Initial price talk for the Rule 144A and Regulation S deal is in the 5½% area, a market source said.

BofA Merrill Lynch, Citigroup Global Markets Ltd., Erste Group Bank AG, Emirates NBD and J.P. Morgan Securities plc are stabilizing managers for the deal.

The issuer is an Ankara, Turkey-based state-owned bank.

Rusal to price bullet

United Co. Rusal plc is expected to price six-year bullet notes, a market source said.

Initial price talk is in the 5.3% area, a market source said.

J.P. Morgan Securities, VTB Capital, Citi, Credit Suisse, Gazprombank, RenCap, Sberbank and Sovcombank are stabilizing managers for the Rule 144A and Regulation S deal.

The notes will be issued via Rusal Capital DAC, a wholly owned finance subsidiary of the Moscow-based aluminum company.

Phosagro coming

Phosagro is expected to price $500 million of four- or five-year notes with initial price talk of 4% to 4¼% on Wednesday, a market source said.

A roadshow for the notes took place from Thursday to Monday, a market source said.

Moody’s Investors Services gave the notes a preliminary rating of Ba1, S&P Global Ratings gave it a BB+, and Fitch Ratings gave it a BBB- rating.

Citi, Sberbank CIB, VTB Capital, BofA Merrill Lynch, Societe Generale, UBS and UniCredit are the organizers for the deal.

Saudi bonds near-flat

With state spending figures coming in over the weekend, Saudi Arabia came in ahead of projections, especially in terms of its expenditure reduction, according to several media reports. The first quarter deficit was SAR 26 billion, versus projections of SAR 54 billion.

Austerity and structural reforms might face challenges going forward, a market source said, which includes the partial sale of Saudi Aramco and subsidy and tax dealings, yet higher oil prices compared to a year prior may be providing some breathing room for the government.

On Tuesday, Saudi Arabia’s 2 3/8% notes due 2021 were quoted with a 98.12 bid, 98.32 offer, down 5 bps from Monday’s close, and its 3.628% notes due 2027 were quoted with a 100.47 bid, 100.52 offer, up 2 bps from a day prior.

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