Brazil, Russia launch, price deals; QNB launches five-year notes at mid-swaps plus 130 bps

By Rebecca Melvin

New York, March 21 – The emerging markets primary was active on Thursday with both Federative Republic of Brazil and Russia, which have been scarce in the new issue market recently, announcing and pricing deals.

Brazil priced $1.5 billion of 4½% notes due 2029, which represented the sovereign’s first new issue since January 2018 and the first since Jair Bolsonaro began to serve as president. Brazil’s notes priced at a reoffered 98.385 to yield 4.7%, or a spread of U.S. Treasuries plus 215.8 basis points. That was tight compared to initial talk for yield in the area of 4.95%.

Russia, through its Ministry of Finance, priced $3 billion new 16-year notes to yield 5.1% and a €750 million tap of its 2 7/8% notes due 2025 to yield 2 3/8%. The sovereign was last in the international bond market late last year when the 2025 notes issue priced. But deals have been few and far between as the threat of U.S. sanctions against the country have threatened. The ongoing strength in the EM market pulled Russia back for these tranches, representing its first new paper of the year.

Pricing of the new Russia notes came well tight to initial talk in the area of 5½%, and pricing of the 2 7/8% 2025 notes priced tight to initial talk of 3 5/8% area, according to a market source.

Demand for the dollar bonds reached more than $7 billion, and demand for the euro issue was more than €3 billion.

Also new to the market was a deal for Qatar National Bank QPSC, which has launched $1 billion offering of five-year notes. The deal was coming a day after Qatar Islamic Bank priced a $750 million sukuk.

QNB managed a sweet price for yield of mid-swaps plus 130 bps, which was tightened from initial price talk of mid-swaps plus 150 bps to 155 bps.

The Regulation S notes were issued by QNB Finance Ltd. through bookrunners ANZ, Barclays, Credit Agricole CIB, Deutsche Bank, ING, QNB Capital and Standard Chartered Bank.

In addition, Sharjah Islamic Bank has selected banks and scheduled roadshow meetings for a planned dollar-denominated benchmark sukuk, or Islamic bond, according to a market source on Thursday.

The Sharjah deal is being led by ABC, Dubai Islamic, HSBC, KfH Capital, Sharjah Islamic Bank and Standard Chartered Bank.

Concurrently with the Regulation S notes offering, Sharjah Islamic Bank is tendering for its $500 million trust certificates due 2021.

And for the Central & Eastern Europe region, CEE-focused PPF Arena 1 BV was in the market talking an offering of euro-denominated seven-year notes to yield 3¼% to 3 3/8% (expected ratings: Ba1//BBB-). The Regulation S notes were initially expected to have a four- to six-year tenor.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.