Morning Commentary: Emerging markets reawaken from summer holidays with new deal launches

By Rebecca Melvin

New York, Sept. 5 – Several new deals launched in emerging markets early Tuesday as market players in the United States returned to work after markets were closed on Monday in observance of Labor Day, and following a two-week lull in market activity amid summer holiday schedules.

Turkey's Coca-Cola Icecek AS launched a deal that was expected to be $500 million to $750 million in size with expectations that it could be held in cash until time to repay its existing $500 million CCOLAT 4¾ notes due Oct. 1, 2018, according to a market source. The new bond may have a tenor of up to 10 years, and the expectation is that the strong credit may attract some crossover investment-grade investors in addition to emerging markets investors.

The Istanbul-based bottler has mandated BNP Paribas, Citi, HSBC, JPMorgan and MUFG as the bookrunners for the senior notes, which will be sold under Rule 144A and Regulation S.

Depending on the terms and tenor it may be an index name, a market source said.

The deal is expected to price next Monday or Tuesday following investor meetings in London and the United States.

“This company has low leverage ratios, and it may maintain a large cash balance to pay for the [2018] deal when it becomes due,” the source said.

Coca-Cola Icecek distributes into emerging market regions including Pakistan.

Also launching early Tuesday is a deal from Russia’s’ Novolipetsk Steel for which proceeds will be used to pay for the tender offers of two dollar-denominated series of notes maturing in 2018 and 2019.

The Lipetsk, Russia-based company has named ING Bank NV, London Branch, J.P. Morgan Securities plc, Societe Generale and UniCredit Bank AG to act as joint dealer managers for the offers.

In Asia, the Philippines’ Asian Development Bank has mandated banks for a five-year dollar-denominated offering. The bookrunners are BofA Merrill Lynch, BNP Paribas, Mizuho and TD Securities.

© 2015 Prospect News.
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