Emerging Markets: Ukraine, Jordan, Sharjah, Lithuania price notes; Braskem brings hybrids

By Rebecca Melvin

New York, July 24 – The emerging markets primary continued to roll out new issues this past week, but summer holidays seem to be taking a bite out of volume.

Ukraine priced $2 billion of 7.253% senior notes due 2033. The deal, which priced at par on Thursday, was scuttled earlier in the month due to the resignation of the sovereign’s top central banker.

The Hashemite Kingdom of Jordan sold $1.75 billion of senior notes (//BB-) in two parts, according to a market source.

A $1.25 billion tranche of 5.85% bonds with a July 7, 2030 maturity was part of the transaction.

Additionally, $500 million of 4.95% bonds due July 7, 2025 was included in the deal.

Citigroup, Goldman Sachs International and HSBC were the stabilizing managers for the Rule 144A and Regulation S deal.

The government of the Emirate of Sharjah sold $1 billion of 4% notes (BBB) due July 28, 2050, according to a market source and a press release.

And in a euro-denominated offering, the Republic of Lithuania priced €1.75 billion 30-year senior notes at 96.27 to yield 0.637%, or a yield spread of 65 basis points over mid-swaps, according to a market source. The spread was tightened from early guidance at mid-swaps plus 80 bps to 85 bps.

Order books for the Lithuania paper rose to in excess of €6 billion at the tight end of guidance. BNP Paribas (billing and delivery), Citigroup and Erste Group are lead managers and bookrunners of the Regulation S deal.

Among emerging markets corporate deals, Brazil’s Braskem SA priced $600 million of 8½% subordinated notes due 2081 (Ba1/B+/BB-).

The notes will be issued through wholly owned subsidiary Braskem Netherlands Finance BV and guaranteed by Braskem.

The company intends to use proceeds for debt prepayment and for general corporate purposes.

This is the first hybrid debt instrument issued by a Brazilian company with 50% equity treatment by S&P Global Ratings and Fitch Ratings and is part of the company’s efforts to reduce its corporate leverage to return to investment-grade status, according to a press release.

Braskem is a Sao Paulo-based petrochemical company.

The Philippines’ Megaworld Corp. priced $350 million of senior unsecured fixed-rate notes with a 4 1/8% coupon and seven-year tenor, according to an announcement.

The Regulation S notes were sold via Citigroup Global Markets Ltd. and The Hongkong and Shanghai Banking Corp. Ltd. as joint global coordinators, joint lead managers and joint bookrunners and Credit Suisse (Singapore) Ltd. and J.P. Morgan Securities plc as joint bookrunners.

BDO Capital & Investment Corp. was lead manager in the Philippines.

The proceeds of the notes are intended for general corporate purposes, which may include, among others, financing capital expenditure, land banking and refinancing of loans.

The notes will be listed on the Singapore Exchange Securities Trading Ltd.

Megaworld is a Makati City, Philippines-based real estate development company.

Among the offerings from China, HFI International (HK) Ltd. sold $260 million of 3.2% notes (//BBB+) with a five-year maturity in its debut international deal. Pricing was 50 bps tighter than initial guidance with the books oversubscribed and reaching over $1.86 billion.

The notes are guaranteed by parent Hangzhou Finance And Investment Group Co., Ltd.

Proceeds will be used for refinancing and business development needs.

Hangzhou Financial is a state-owned enterprise.

Looking ahead, Hong Kong-based lender Chong Hing Bank Ltd. announced it has applied to list a $2 billion medium-term note and perpetual capital securities program, according to a release.

The program being listed on the Hong Kong exchange is expected to remain in place for one year from Friday and to become effective on July 27.

The arrangers and dealers of the program are Chong Hing Bank, HSBC, ABC International, BOC International, CCB International and Yue Xiu Securities Co. Ltd.

Chong Hing is a Hong Kong-based lender.

Ukraine brings postponed notes

Ukraine postponed an offering of notes on July 2 after announcing the deal June 30. The delay was in response to the resignation of the governor of the National Bank of Ukraine, Yakiv Smolii. The resignation was over what Smolii called systemic political pressure that threatened the institution’s independence.

The move was viewed as a setback for the sovereign in terms of its recently agreed funding from the International Monetary Fund that is seen as vital for the country to navigate through the coronavirus pandemic.

The new Rule 144A and Regulation S notes were sold via J.P. Morgan Securities plc and Goldman Sachs International.

The sovereign was conducting a concurrent tender offer. And both deals were restarted after being canceled July 2.

The sovereign had been expected to issue $1.75 billion of new notes at that time and a switch tender offer for $1,409,282,000 7¾% notes due 2021 and $1,383,692,000 7¾% notes due 2022.

The decision to cancel was made to give investors sufficient time to assess the news.

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