Turkey brings new notes; Colombia advances deal; Argentina, Embraer, Kexim, GIB ahead

By Christine Van Dusen

Atlanta, Jan. 18 –Turkey braved the primary market on Wednesday – even as the sovereign awaited an update from Fitch Ratings and the upcoming meeting of the Central Bank – amid better stability for emerging markets.

“This trade has probably killed some of the technical bid we had in cash from ETF buyers,” a trader said. “The belly has underperformed, giving back most of its gains over the last few sessions. We are seeing some flattening in the curve.”

In the new deal, Turkey priced $2 billion 6% notes due March 25, 2027 at 98.858 to yield 6.15%, or Treasuries plus 375.7 basis points, according to a filing from the sovereign.

The notes were initially talked in the 6.2% area.

Barclays, Citigroup, Goldman Sachs and QNB Capital were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general financing purposes.

Valuations on the new bond looked “attractive versus the curve, with Turkey 2045s at 6.65% area,” another trader said.

In the gray market the new notes were seen trading up 25 cents on the bid side and 75 cents on the offer side.

In other news, Colombia launched a $2.5 billion issue of notes due in 2027 and 2045, and the Philippines set talk in the 3.95% area for a dollar-denominated issue of notes due in 25 years. And several other issuers – including Argentina, Brazil’s Embraer SA and Gulf International Bank BSC (GIB) – lined up deals.

Colombia launches two tranches

Colombia’s deal included $1 billion 10-year notes that launched at Treasuries plus 160 bps. The $1.5 billion tap of the 5% notes due in 2045 launched at Treasuries plus 210 bps.

Citigroup, Itau BBA and Morgan Stanley are the bookrunners for the SEC-registered deals.

The proceeds will be used for general governmental purposes.

The notes will include a make-whole call.

Philippines on deck

Citigroup, Credit Suisse, Deutsche Bank, Standard Chartered and UBS are the bookrunners for the Philippines’ SEC-registered deal.

The proceeds will be used to finance the budget and repay debts.

The deal is expected to settle on Feb. 2.

Argentina gives guidance

Argentina set talk for a two-tranche issue of benchmark-sized and dollar-denominated notes due in five and 10 years, a market source said.

The five-year notes were talked at a yield in the high-5% area. The 10-year notes were talked in the low-7% area.

Santander, BBVA, Citibank, Deutsche Bank, HSBC and JPMorgan are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general purposes.

Pricing is expected to take place on Thursday.

Roadshow for Kernel

Ukraine’s Kernel Holding SA will set out on Thursday for a roadshow to market a dollar-denominated issue of benchmark-sized notes due in five years, according to a company announcement and a market source.

JPMorgan and ING are the bookrunners for the Rule 144A and Regulation S deal

The roadshow will take place in Europe and the United States.

Kernel is an agribusiness company based in Kiev.

Embraer sets marketing trip

Brazil’s Embraer, via Embraer Netherlands Finance BV, will set out on Jan. 23 for a roadshow to market a dollar-denominated issue of notes due in 10 years, according to a company filing.

BB Securities, JPMorgan and Santander are the bookrunners for the SEC-registered deal.

The notes will include a make-whole call.

The proceeds will be used for general corporate purposes.

Embraer is an aircraft manufacturer based in Sao Jose dos Campos, Brazil.

Kexim deal announced

Export-Import Bank of Korea is planning to issue three tranches of dollar-denominated notes, according to a company filing.

The deal will include one tranche of floating-rate notes and two tranches of fixed-rate notes.

Citigroup, Itau BBA and Morgan Stanley are the bookrunners for the SEC-registered deal. Hanwha Investment & Securities is the joint lead manager, and Kexim Asia is the co-manager.

The proceeds will be used for general operations.

Bottler plans bonds

Guatemala’s Central American Bottling Corp. is planning to issue new notes alongside a tender offer, according to a company announcement.

The company is holding a cash tender offer for any and all of its outstanding 6¾% senior guaranteed notes due 2022.

Citigroup and JPMorgan are leading the Rule 144A and Regulation S transaction.

The producer, distributor and marketer of beverage products is based in Guatemala City.

Bahrain bank sets tenor

Also on Wednesday, Bahrain’s Gulf International Bank set the tenor at five years for its upcoming issue of dollar-denominated notes, according to a company announcement.

JPMorgan, GIB Capital, Citigroup, HSBC, Mizuho Securities, National Bank of Abu Dhabi and Standard Chartered Bank are the bookrunners for the Regulation S deal.

“The new bonds could offer scarcity value and benefit from $500 million maturing at the end of the year,” a trader said. “Interestingly, the bank is headquartered in Bahrain but can be considered largely insulated from risks of the Bahraini banking sector, given that Bahraini exposure only accounts for 6% of the loan book while GIB’s articles also take precedence over Bahrain law in the event of a conflict with the law.”

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