Roadshow for Dar Al-Arkan Real Estate; Damac Real Estate plans bonds; South Africa widens

By Christine Van Dusen

Atlanta, March 31 – Dar Al-Arkan Real Estate Development Co. set a roadshow and Dubai’s Damac Real Estate Development Ltd. planned new notes on a Friday that saw bonds from South Africa widen on the news that the finance minister was getting the boot.

“President Zuma finally pulled the trigger on the cabinet reshuffle, which sees nine cabinet members being replaced,” a London-based analyst said. “Finance Minister Gordhan is certainly the most prominent member and will be replaced by previous Home Affairs Minister Gigaba, who is considered to be loyal to President Zuma and with little financial and business experience.”

Five-year credit default swaps spreads and cash bonds initially widened by 20 basis points to 25 bps “in line with our expectations,” he said. “The external macro backdrop could buffer any more meaningful widening for now.”

South Africa’s Naspers Ltd. saw its bonds move out between 10 bps and 13 bps while Eskom Holdings’ notes widened by about 35 bps, he said.

“South African credit has had a solid run over the last few months despite the lurking political risks,” he said. “We think that the strong technical is likely to dissipate now, with risks continuing to remain to the downside.”

In deal-related news, Saudi Arabia’s Dar Al-Arkan Real Estate Development will set out on a roadshow to market a dollar-denominated issue of Islamic bonds due in five years, a market source said.

Other details were not immediately available on Friday.

Damac to issue notes

Dubai’s Damac Real Estate Development is planning to issue new dollar-denominated trust certificates with a tender offer for up to $250 million of the $650 million of trust certificates due 2019 issued by Alpha Star Holding Ltd.

The company is offering to pay 101.5% of par for the certificates plus accrued interest up to but excluding the settlement date, according to a notice from the issuer.

The new notes will be issued by Alpha Star Holding III Ltd.

Emirates NBD PJSC, HSBC Bank plc and Merrill Lynch International are dealer managers.

Saudi Arabia trades

Also from the Middle East, the three-tranche issue of notes due in 2021, 2026 and 2046 from Saudi Arabia remained on radar screens.

The 2 3/8% notes due in 2021 that priced at 99.007 to yield 2.588%, or Treasuries plus 135 bps, were seen Friday at 98¼ bid, 98½ offered after Thursday’s 98.37 bid, 98.62 offered and Wednesday’s 98.18 bid, 98.43 offered.

The 3¼% notes due in 2026 that priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, were at 97¼ bid, 97½ offered after Thursday’s 97.37 bid, 97.62 offered and Wednesday’s 97.18 bid, 97.43 offered.

And the 4½% notes due in 2046 that priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, were seen Friday at 98.56 bid, 98.81 offered after Thursday’s 98.62 bid, 98¾ offered and Wednesday’s 98.38 bid, 98.63 offered.

Citigroup, HSBC, JPMorgan, Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, MUFG Securities, Morgan Stanley and NCB Capital were the bookrunners for the Rule 144A and Regulation S deal.

Indonesia Eximbank prices notes

On Thursday, Indonesia Eximbank priced $500 million 3 7/8% notes due April 6, 2024 at 99.848 to yield 3.9%, according to a company filing and a market source.

HSBC, MUFG Securities and OCBC Bank were the bookrunners for the Regulation S deal.

The issuer is based in Jakarta.

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