Emerging Markets: Lukoil, Norilsk Nickel, AngloGold, Codelco price deals; Hungary, China issue

By Rebecca Melvin

Concord, N.H., Oct. 22 – Issuance in the emerging markets bond market this past week came from all of the regional territories and from a wide range of individual companies and included sovereign players, according to Prospect News’ data. Mining company issuers were also a feature this past week.

Russia’s Lukoil Capital DAC sold $2.3 billion of notes (Baa2//BBB+) in two tranches on Thursday, and PJSC MMC Norilsk Nickel sold $500 million of 2.8% five-year notes (Baa2/BBB-) on Wednesday.

The Lukoil Capital notes are guaranteed by PJSC Lukoil.

Norilsk Nickel’s notes came at pricing that was lower than initial price talk in the 3 1/8% to 3¼% area and lower than tightened guidance in the 3% area.

Citigroup, Societe Generale and UBS Investment Bank are joint global coordinators and, together with Goldman Sachs International, Mizuho Securities, SberCIB, SMBC Nikko and VTB Capital, joint bookrunners of Norilsk’s Rule 144A and Regulation S deal.

South Africa’s AngloGold Ashanti Holdings plc priced $750 million 3 3/8% seven-year senior guaranteed notes to yield Treasuries plus 195 basis points, with the deal pricing at 99.788 for yield of 3.409%.

The spread matched talk, which had tightened from an initial Treasuries plus 225 bps area, moving to the Treasuries plus 210 bps area and finally launching at 195 bps, according to syndicate sources on Tuesday.

The notes (expected ratings: Baa3/BB+/BBB-) will be fully and unconditionally guaranteed by AngloGold Ashanti Ltd.

And Corporacion Nacional del Cobre de Chile (Codelco), the Santiago, Chile-based copper mining company, priced $1 billion of 1¼% bonds due 2024 (Aa3/A+/A+) on Tuesday at a spread of Treasuries plus 65.4 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.666 to yield 1.364%.

More than 230 orders for a total of over $4.5 billion of the bonds were received. The rate is the lowest of any bond issued by Codelco.

The bookrunners on the deal were Barclays Bank plc, BNP Paribas, Daiwa Capital Markets Europe Ltd. and J.P. Morgan Securities plc.

Proceeds will be used to repay debt due in the fourth quarter of 2021 and the first quarter of 2022.

On the same day, Codelco also sold a $780 million tap (A3) of its 3.7% notes due Jan. 30, 2050. The reopening yield was 3.831%, and they priced with a spread over Treasuries of 175 bps, 30 bps low to talk in the 205 bps area.

Demand was marked at around 3.5-times deal size with 130 accounts participating.

BofA Securities, BNP Paribas, JPMorgan and Santander led the sale.

The company was working to fund a tender offer for three series of notes. The tender offer was contingent on the sale of the notes.

Latin America was also represented by Brazil’s stock exchange, B3 SA – Brasil, Bolsa, Balcao, which priced $700 million of 4 1/8% 10-year sustainability notes (Ba1) at par.

Venezuelan-based regional lender Corporacion Andina de Fomento priced $1 billion of 1¼% three-year notes (Aa3/A+/A+) to yield Treasuries plus 65.4 bps on Tuesday. Barclays Bank plc, BNP Paribas, Daiwa Capital Markets Europe Ltd. and J.P. Morgan Securities plc are joint bookrunners for the senior notes.

For Asia, Korean lenders continued an issuing steak. Korea Development Bank priced $1.5 billion of notes in a three-part offering on Monday, including a tranche of green notes.

In addition, Korea Housing Finance Corp. sold €550 million of 0.258% seven-year social bonds (AAA) at par, according to a regulatory notice.

BNP Paribas, HSBC, ING, Societe Generale and Standard Chartered Bank are the joint bookrunners and joint lead managers, a syndicate source supplied with initial information about the deal.

The Regulation S and Rule 144A bond is backed by Korean residential mortgages.

The housing finance company is based in Seoul, South Korea.

Elsewhere in Asia, the People’s Republic of China through its Ministry of Finance priced $4 billion of notes (A1/A+/A+) in four series due in three, five, 10 and 30 years.

All four series came approximately 30 bps lower than initial talk. The bonds sold represented a record low pricing spread for China’s dollar sovereign bonds, the Ministry of Finance noted. The deal was more than six times oversubscribed.

The republic sold

• $1 billion of ¾% three-year notes to yield 0.772% at a spread of Treasuries plus 6 bps versus initial price talk in the Treasuries plus 35 bps area;

• $1.5 billion 1¼% five-year notes to yield 1.275% at a spread of 12 bps over Treasuries, low to initial talk in the 45 bps area;

• $1 billion of 1¾% 10-year notes to yield 1.86% with a spread of Treasuries plus 23 bps, after initial talk in the 55 bps area; and

• $500 million of 2½% 30-year notes to yield 2.605% at a spread of Treasuries plus 53 bps, lower than talk in the 85 bps area.

Bank of China, Bank of Communications, China Construction Bank, China International Capital Corp., ICBC, BofA Securities, Citigroup, Credit Agricole CIB, CTBC Bank, Deutsche Bank, Goldman Sachs, JPMorgan, Mizuho Securities and Standard Chartered Bank are stabilizing managers of the Rule 144A and Regulation S notes.

The bonds were sold in Hong Kong.

Hungary was another sovereign issuer, selling €1 billion of 1/8% seven-year bonds at 98.611 to yield 0.326% with a coupon is the lowest by the Hungarian state on a euro issue. And the offer was four times oversubscribed, with pricing coming at 48 bps over mid-swaps versus talk at mid-swaps plus 75 bps.

Elsewhere in Asia, Dongfeng Motor (Hong Kong) International Co., Ltd., a wholly owned subsidiary of Dongfeng Motor Group Co. Ltd., priced €725 million of 0.425% guaranteed notes (A2//A) due 2024 at par.

There is a make-whole call at Bunds plus 20 bps until one month before the maturity date, when the notes will be callable at par.

Bank of China and Deutsche Bank are the joint global coordinators, joint lead managers and joint bookrunners for the offering.

And Singapore-based research university Nanyang Technological University (NTU) sold $650 million of sustainability-linked notes (Aaa) due Oct. 20, 2036, according to a listing notice on Wednesday.

The notes are a drawdown from NTU’s multicurrency medium-term note program.

DBS Bank Ltd. and United Overseas Bank Ltd. are the joint lead managers and joint bookrunners for the offering.

According to Moody’s Investors Service, proceeds will be used to fund eligible projects under NTU’s sustainability framework.

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