Emerging markets: Apicorp brings $750 million five-year green bonds; ADB prices $3 billion

By Rebecca Melvin

Concord, N.H., Oct. 1 – Arab Petroleum Investments Corp. (Apicorp) priced $750 million of 1.483% five-year green notes on Wednesday and Asian Development Bank was another attention grabber with its $3 billion of 5/8% three-year bonds, which also priced on Wednesday. But the pace of emerging markets bond issuance pulled back somewhat, according to Prospect News’ data, amid a bout of market volatility this past week, marking the end of the third quarter.

The yield on U.S. Treasuries jumped higher in the final days of the quarter, but the market seemed to get a little lift on Friday with a reset of sorts and the beginning of the fourth quarter. The 10-year Treasury note gained slightly with the yield at 1.467%, down 0.021%, late Friday.

China Evergrande Group remains a worry for investors. This week the group said it continues to explore the disposal of certain equity interests in its electric car business, Evergrande New Energy Vehicle Group Ltd., and Evergrande Property Services Group Ltd. It will also be moving to adjust its project development timeline, strictly control costs, vigorously promote sales and payment collections, strive for renewal and extension of borrowings, dispose of equity interests and assets (including but not limited to investment properties, hotels and other properties) and introduce new investors to increase the equity of the group and its subsidiaries, with the objective to further improve liquidity, relieve financial pressure and reduce debt.

But if the group fails to implement these measures, maintains existing financing and/or obtains necessary new financing as planned, its liquidity issues may deteriorate, sparking defaults on borrowings and litigation that may have a material adverse effect on the group, the company said in an interim report for the year released on Monday.

The Guangzhou, China-based real estate development company has RMB 571.8 billion of debt, of which 42% matures in less than one year. An additional 27.4% matures in one to two years and 28.7% matures in two to five years. Only 1.9% matures after five years.

Apicorp active

Despite the market uncertainties, Apicorp priced $750 million of 1.483% five-year green notes on Wednesday, to yield mid-swaps plus 40 basis points, or Treasuries plus 47.6 bps.

Pricing came low to talk in the mid-swaps plus 50 bps area.

Investor calls were held on Monday and Tuesday for the Rule 144A and Regulation S deal.

The notes are being issued under the green bond framework that was established in April.

Credit Agricole CIB, BofA Securities, Inc., Barclays, HSBC, JPMorgan, Landesbank Baden-Wurttemberg, Nomura and Standard Chartered are bookrunners.

Arab Petroleum Investments is a government fund based in Saudi Arabia.

ADB details

ADB priced $3 billion of 5/8% three-year bonds at 99.946 on Wednesday with a spread of mid-swaps plus 13 bps, or Treasuries plus 9.1 bps.

Initial price talk was in the mid-swaps plus 15 bps area.

“Given the robust orderbook in excess of $6.6 billion, final pricing was set 2 basis points inside initial price thoughts with a print size of $3 billion that was in line with our remaining funding requirement from the U.S. dollar global market for 2021,” said ADB treasurer Pierre Van Peteghem in a news release.

BofA Securities, Morgan Stanley, Nomura and RBC Capital Markets were the bookrunners.

The regional development bank is based in Mandaluyong, Philippines.

Becle taps market

Turning to other regions, Mexico’s Becle, SAB de CV sold $800 million of 2½% 10-year notes with a Treasuries plus 110 bps spread on Thursday, according to a market source.

Initial price talk on the notes was in the Treasuries plus 125 bps area.

Citigroup, Goldman Sachs and Morgan Stanley worked as bookrunners for the offering.

The company said that it would use the proceeds from the Rule 144A and Regulation S notes to fund its tender offer for its 3¾% senior notes due 2025 and for general corporate purposes.

Becle is a Mexico City-based producer, bottler and distributor of alcoholic and non-alcoholic beverages.

And looking ahead, Mexico City-based telecommunications company America Movil SAB de CV plans to price Mexican peso-denominated debt securities from time to time, according to a 424B2 filing with the Securities and Exchange Commission.

Proceeds will be used for general corporate purposes.

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