Primary pace picks up; Sabic’s planned notes look flat bid in gray; Papua New Guinea bond moves higher

By Rebecca Melvin

New York, Oct. 2 – Four deals that had been on the calendar for the Central & Emerging Europe, Middle East and Africa region were pricing on Tuesday, including two tranches for Saudi Arabia’s Saudi Basic Industries Corp. (Sabic), a €500 million seven-year deal for the Republic of Albania and $500 million five-year notes for Qatar’s Al Khalij Commercial Bank PQSC, which priced at 99.683 with a 4¾% coupon and a spread of mid-swaps plus 175 basis points.

Bahrain’s Gulf International Bank BSC, which was also on the calendar, was still meeting investors on Tuesday regarding a dollar five-year note. Wednesday would be the earliest possible window to see that price, a syndicate source said.

The Sabic notes were thought to be flat bid on both tranches in the gray market ahead of final terms being fixed, according to a London-based trader.

The Riyadh-based manufacturer of chemicals, fertilizers, plastics and metals was pricing the five- and 10-year notes to yield Treasuries plus 115 bps and Treasuries plus 155 bps, respectively, after guiding the notes to yield Treasuries plus 125 bps and Treasuries plus 165 bps, respectively.

Pricing was tightened from initial talk in the area of Treasuries plus 140 bps and Treasuries plus 180 bps.

Moody’s Investors Service said its A1 rating on the notes reflects the issuer’s strong business position in the chemical sector and its ability to weather industry volatility, particularly given its healthy operational cash flows and conservative liquidity profile.

Doha-based Al Khalij priced tight compared to initial talk in the mid-swaps plus 195 bps area.

Albania’s euro deal was launched to yield 3.55% and allocations were out, but final pricing was not heard by Prospect News’ deadline.

Papua New Guinea’s 8 3/8% notes due 2028, which priced last week, were trading in the Asia market early Tuesday at 101.625 bid, 102.125 offered, according to a market source.

Papua New Guinea priced a $500 million deal – its first and only bond –at par on Sept. 28. Pricing came tight to initial price talk in the 9% area. The bonds are rated B2 by Moody’s and B by S&P’s.

The 10-year senior unsecured notes were heard in the gray market ahead of pricing at 100.375 to 100.5, according to a market source. Citigroup and Credit Suisse were the bookrunners for the Rule 144A and Regulation S notes.

A pair of Petroleos Mexicanos SAB de CV bonds ended the Tuesday session little changed after active trade. The Pemex 6¾% bonds due 2047 were flat at 94.3 to 94.4. The bonds had traded as high as 95.4 intraday. The Pemex 6½% notes due 2027 were also little changed at about 102.2 to 102.3 after trading both higher and lower than that level in active trade intraday.

Mexican bonds tightened and the peso rallied early Monday before easing back late in the day after news that Canada had joined its North American neighbors in a trade agreement, that has been renamed the United States-Mexico-Canada Agreement. On Tuesday the Pemex bonds ticked firmer intraday, but ended little changed.

The Mexican peso was weaker on Tuesday at 18.80 per U.S. dollar. But Brazil’s real strengthened after a poll showed that Jair Bolsonaro, the market friendly candidate in the upcoming presidential election, had recouped some lost ground.

The real was up 1.5% after the opinion poll showed a likely presidential election second-round run-off would result in a tie between Bolsonaro, the far right candidate, and Fernando Haddad, the leftist workers party candidate.

Brazil’s Petroleo Brasileiro SA bonds ended higher by nearly a point as shares of the energy company rallied. The Petrobras 5.999% due 2028 closed at 94 from 91¾ bid, 92 offered late Monday.

The Petroleos 5¾% notes due 2029 closed around 89¾ bid, 90 offered, which was up from 88¾ late Monday.

Petrobras shares surged 9% amid a strong Brazilian stock market overall.

Argentina's peso was also better on the day ahead of the country’s central bank sale of short-term debt aimed at easing inflation.

Sabic tightens tranches

Sabic set yield spreads for its dual-tranche offering of five- and 10-year notes (expected rating: A1//) to yield Treasuries plus 115 basis points and Treasuries plus 155 bps, respectively, according to a syndicate source on Tuesday.

Pricing was tightened from guidance of Treasuries plus 125 bps and initial talk in the area of Treasuries plus 140 bps for the five-year notes; and from guidance of Treasuries plus 165 bps and initial price talk of Treasuries plus 180 bps for the 10-year notes.

Combined order books at the time of the first guidance update was about $5.5 billion, with a skew to the 10-year tranche.

BNP Paribas and Citigroup are global coordinators, with HSBC, MUFG and Standard Chartered Bank acting as joint lead managers of the Rule 144A and Regulation S deal.

Al Khalij prices benchmark deal

The Al Khalij notes (A3//A) priced to yield mid-swaps plus 175 bps, which was tightened from initial talk at the mid-swaps plus 195 bps area. The order book grew to $1.4 billion.

Barclays, ANB Capital, Standard Chartered Bank and the Commercial Bank were joint lead managers and bookrunners for the Regulation S deal.

AKCB Finance Ltd., a subsidiary of Qatar’s Al Khalij Commercial Bank, priced $500 million 4¾% five-year notes at 99.683 on Tuesday for a yield spread of mid-swaps plus 175 basis points, according to a syndicate source.

The lender is based in Doha.

Gulk International on tap

After fixed-income investor meetings on Monday and Tuesday, the Bahrain bank was being eyed for a deal to price on Wednesday.

GIB Capital will act as global coordinator, and Citigroup, First Abu Dhabi Bank, GIB Capital, HSBC, JPMorgan, and Mizuho are bookrunners for the offering that is expected to be a five-year dollar note.

Gulf International was last in the international bond market for $500 million of 3½% notes due 2022 that priced in January 2017.

Albania prices

Albania, through its Minister of Finance and Economy, launched €500 million seven-year notes (expected rating: B1/B+/) for a yield of 3.55%, according to a syndicate source on Tuesday.

The sovereign issuer plans to use some proceeds to buy back up to €200 million principal amount of an outstanding €450 million of its 5¾% notes due 2020.

Pricing of the Rule 144A and Regulation S notes was tight compared to earlier guidance at 3.60% to 3.70% and from initial price talk in the area of 3¾%. Final pricing is expected later Tuesday.

Order books prior to launch were in excess of €1 billion.

© 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.