Issuance from Kernel, NTPC; Egypt bonds in focus; Asia, Mexico, Brazil bonds eyed

By Christine Van Dusen

Atlanta, Jan. 25 – Ukraine’s Kernel Holding SA and India’s NTPC Ltd. sold notes on a mostly stable Wednesday for emerging markets assets.

“While there are enough reasons to remain on the cautious side, sentiment in EM credit remains solid, which gets the primary market going,” a London-based analyst said.

The $4 billion deal that Egypt priced on Wednesday received some attention.

The deal included $1.75 million 6 1/8% notes due 2022, $1 billion 7½% notes due 2027 and $1.25 billion 8½% notes due 2047. All three tranches priced at par.

“While comments from Finance Minister El-Garhy indicated an issuance size of only $2.5 billion, the sovereign increased the size to $4 billion on the back of a roughly $13.5 billion order book,” the analyst said. “As expected, demand for the five-year and 30-year tranches was higher, given the strong investor base in the short-end and the more visible premium in the long-end.”

BNP Paribas, JPMorgan and Natixis Securities were the bookrunners for the Rule 144A and Regulation S deal.

The new 2022 notes traded Wednesday at 100.20 bid, 100.40 offered before closing at 100.06 bid, 100.31 offered. The 2027 notes traded at 100.07 bid, 100.37 offered before closing at par bid, 100¼ offered. And the 2047 notes were spotted at 100½ bid, 101 offered before closing at 100.43 bid, 100.93 offered.

In deal-related news, market-watchers were also whispering about a possible issue of eurobonds in February or March from Russia-based OJSC Gazprom.

Asia dips

For much of the emerging markets universe, the “situation remains rather stable in the bond market,” according to a report from Schildershoven Finance BV. “We expect that bonds will continue to trade close to the current levels.”

But Asian bonds slipped slightly on Wednesday.

“Market activity has been weakened ahead of the holidays,” the report said. “However, the trend remains positive amid higher commodities prices.”

Looking to Latin America, investors in Mexico’s bond market were eyeing Trump’s renegotiation of the North American Free Trade Agreement.

“And investors in the Brazilian market are concerned over possible acceleration of the corruption investigation,” Schildershoven said.

Kernel prices notes

Ukraine’s Kernel Holding priced $500 million 8¾% notes due Jan. 31, 2022 at 99.504, according to a company announcement.

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

Other details were not immediately available on Wednesday.

Kernel is an agribusiness company based in Kiev.

NTPC sells bonds

In its new deal, India’s NTPC priced a $500 million issue of 2¾% notes due Feb. 1, 2027 at 99.449 to yield 2.814%, or mid-swaps plus 200 basis points, a syndicate source said.

Axis Bank, Barclays, Citigroup, MUFG, SBI Capital Markets and Standard Chartered Bank were the bookrunners for the Regulation S deal.

The proceeds will be used for projects in India.

NTPC is a New Delhi-based power company.

ICD sets talk

Investment Corporation of Dubai (ICD) set talk in the mid-swaps plus 290 bps area for a dollar-denominated issue of benchmark-sized Islamic bonds due in 10 years, a market source said.

Citigroup, Emirates NBD, HSBC, JPMorgan, National Bank of Abu Dhabi and Standard Chartered are the bookrunners for the deal.

ICD is a sovereign wealth fund.

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