Emerging Markets: Dominican Republic, Slovenia price; Israel Electric sells 10-year notes

By Rebecca Melvin

Concord, N.H., Feb. 18 – Sovereign issuers Dominican Republic and Slovenia priced dual-tranche offerings this past week as primary action slowed in general amid continuing bond market redemptions, rising rates and ahead of a long holiday weekend in U.S. financial markets, which will be closed on Monday in observance of Presidents Day.

On the corporate side, Israel Electric Corp. Ltd. brought a 10-year benchmark-sized issue of notes, namely $500 million of 3¾% notes due Feb. 22, 2032.

The IEC notes were reoffered at 99.686 for a yield of 3.788% or a spread to Treasuries of 175 basis points. That pricing was tight to talk in the area of Treasuries plus 205 bps, according to a market source on Wednesday.

Korea Development Bank priced $1.5 billion of notes (expected ratings: Aa2/AA/AA-) in two parts due 2025 and 2027, and a third tranche of green notes was also expected to price, according to FWP filings and a 424B5 filing with the Securities and Exchange Commission.

From China, Midea Group Co. Ltd. priced $450 million of five-year green bonds (A/A). These notes priced at Treasuries plus 98 bps, according to a company release.

Order books topped out at $2.4 billion for the deal that was issued by Midea Investment Development Co. Ltd.

Proceeds will be used to fund green projects, including Midea’s green design and green manufacturing, its low-carbon strategy, upgrading to energy-saving manufacturing equipment, green upgrading of energy infrastructure and increasing renewable energy procurement.

The electric appliance maker is headquartered in Beijiaozhen, China.

Beijing State-owned Capital Operation and Management Center Investment Holdings Ltd. said it has a euro-denominated benchmark of notes in the works, according to a notice Wednesday.

The notes due Feb. 23, 2025 (ISIN: XS2445374213) are guaranteed by Beijing State-owned Capital Operation and Management Co. Ltd.

Deutsche Bank, Bank of China, ICBC International and ABC International are managers of the Regulation S deal.

The company is wholly owned by Beijing State-owned Assets Supervision and Administration Commission (Beijing Sasac) and invests in projects to support industrial upgrade in the city.

Looking ahead, San Miguel Corp. set interest rates for its planned local-currency offering of up to PHP 25 billion of five-year series J bonds due 2027 with an over-allotment option of up to PHP 5 billion of seven-year series K bonds due 2029, according to a 17-C filing with the Philippine Securities and Exchange Commission.

The series J bonds will have a fixed rate of 5.2704% and the series K bonds will have a fixed rate of 5.8434%. The bonds will be issued on March 4.

As previously announced, the Mandaluyong City, Philippines-based conglomerate plans to issue PHP 60 billion of fixed-rate bonds within a three-year period. The bonds will be sold at par.

Proceeds will be used to refinance short-term loan facilities and for other general corporate purposes.

Dominican Republic sells bonds

Although issuance slowed overall amid another bout of market volatility this past week, Dominican Republic sold $3.56 billion of bonds in two equal parts (BB-/BB-) to support a liability management operation, according to a press release and the republic’s Ministry of Finance’s Twitter account.

The republic sold $1.78 billion of 5½% bonds due 2029 and another $1.78 billion of 6% bonds due 2033.

Demand for the notes hit $8.5 billion, more than 2.4 times the final allocation.

Proceeds will be used to fund the liability management operation with $2.3 billion slated to cover the 2022 operating budget for the country.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were bookrunners for the deals.

Slovenia taps two series

Slovenia priced a €750 million dual-tranche offering of notes on Wednesday, including a tap of its 2¼% notes due March 3, 2032 and a tap if its 0.4875% notes due Oct. 20, 2050, according to a syndicate source.

The €350 million tap of 2¼% notes priced at 112.39 to yield 0.948%, or a spread of mid-swaps plus 13 bps, after being talked at mid-swaps plus 15 bps area.

The €400 million tap of 0.4875% notes priced at 76.577 to yield 1.499%, or a spread of mid-swaps plus 68 bps, after being talked in the mid-swaps plus 70 bps area.

The order books for the notes stood in excess of €1.1 billion at the time of launch, with orders about evenly divided between the two tranches.

Barclays, BNP Paribas, Credit Agricole CIB, Deutsche Bank, Erste Group and JPMorgan are bookrunners for the Regulation S transactions.

IEC 10-year in focus

Israel Electric priced $500 million of 3¾% notes due Feb. 22, 2032 at a reoffered price of 99.686 for a yield of 3.788% or a spread to Treasuries of 175 bps, according to a market source on Wednesday.

Pricing was tight to talk in the area of Treasuries plus 205 bps.

The Rule 144A and Regulation S notes (expected ratings: Baa1/BBB) are callable at par plus a make-whole premium of Treasuries plus 30 bps, and they have a change-of-control put at par.

The notes were marketed via Barclays and BNP Paribas as joint bookrunners.

The electricity company, which is 99.85% state owned, is based in Haifa, Israel.

KDB wades in

Korea Development Bank priced $1.5 billion of notes (expected ratings: Aa2/AA/AA-) in two parts due 2025 and 2027. A third tranche of green notes was also expected to price, according to FWP filings and a 424B5 filing with the Securities and Exchange Commission.

Joint bookrunners and lead managers for the notes are BofA Securities Inc., BNP Paribas SA, HSBC Ltd., J.P. Morgan Securities LLC, KDB Asia Ltd., Societe Generale CIB and UBS AG Hong Kong Branch.

Kexim Asia Ltd. is co-manager of the deal.

The $1 billion tranche of 2% notes due Feb. 24, 2025 priced at 99.633, and the $500 million tranche of 2¼% notes due Feb. 24, 2027 priced at 99.489. The deals priced on Wednesday.

Proceeds will be used for general operations. Proceeds from the green notes will be used toward financing and/or refinancing new or existing projects from eligible green categories. Sustainalytics provided a second-party opinion.

Approval in-principle has been received from the Singapore Exchange Securities Trading Ltd. for the listing and quotation of the notes.

The fiscal agent is Bank of New York Mellon.

The bank is based in Seoul, South Korea.

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