Emerging Markets: Tencent prices $6 billion of notes; Petrobras raises $3.25 billion

By Rebecca Melvin

New York, May 29 – Tencent Holdings Ltd., a China-based investment holding company, priced $6 billion of notes in four tranches this past week.

That led a bevy of much smaller emerging markets debt deals for Asia in the holiday-shortened week, with Brazil’s Petrobras Global Finance BV providing the only other multi-billion dollar deal with a $3.25 billion haul of global notes issued this past week. Emerging markets debt capital markets were otherwise largely closed outside of Asia.

The Memorial Day holiday meant U.S. markets remained closed on Monday after an early bond market close on the previous Friday. Other than the Petrobras deal, the Latin America region was largely quiet, as was Central & Emerging Europe and the Middle East and Africa. Only Asia yielded any deals of notable size and number.

A bank and a property development group brought $600 million in notes each. Bank of East Asia, Ltd. priced $600 million of subordinated notes due 2030 under its $6 billion medium-term note program.

Hongkong Land Finance (Cayman Islands) Co. Ltd. sold $600 million 2 7/8% senior notes (A2/A) due May 26, 2030, according to a market source and a pricing supplement.

The notes are guaranteed by Hongkong Land Co. Ltd.

The Bank of East Asia deal included as underwriters of the notes Bank of East Asia, Ltd., Citigroup, Goldman Sachs (Asia) LLC, Standard Chartered Bank, ABC International, AMTD, BofA Securities, Inc., BOC International, CCB International, Credit Agricole CIB, Shanghai Pudong Development Bank Hong Kong Branch and Wells Fargo Securities.

Bank of East Asia, Citigroup, Goldman Sachs and Standard Chartered Bank are also joint global coordinators.

Listing is expected on June 1.

Bank of East Asia is based in Hong Kong.

The Bank of East Asia notes were issued through managers Bank of China (Hong Kong) Ltd., DBS Bank Ltd., HSBC Ltd., Mizuho Securities Asia Ltd. and MUFG Securities Asia Ltd.

Elsewhere, Keppel Corp. Ltd. priced $300 million of 2.459% notes due 2025, according to a company announcement.

Daiwa Capital Markets Singapore Ltd. and Oversea-Chinese Banking Corp. are the lead managers.

The notes will be issued under the company’s $5 billion multicurrency medium-term note program.

Proceeds will be used for general corporate purposes.

Keppel is a Singapore company specializing in marine, property and infrastructure businesses.

Henderson Land Development Co. Ltd. subsidiary Henderson Land MTN Ltd. priced $300 million of 2 3/8% notes due 2025, according to a notice on Wednesday.

The notes are guaranteed by Henderson Land Development and were issued under the company’s $5 billion medium-term note program.

Bank of China (Hong Kong), BOC International, DBS Bank, Daiwa Capital Markets Singapore Ltd. and Mizuho Securities are joint bookrunners and joint lead managers for the Regulation S offering.

Listing of the notes on the Stock Exchange of Hong Kong Ltd. is expected to take effect on May 28.

Henderson Land is a Hong Kong-based property company.

And the Philippines’ San Miguel Corp. said it has obtained approval of its board of directors to issue up to $1 billion of perpetual securities to be issued in U.S. dollars or its equivalent in Philippine pesos.

The company’s management will determine the date or dates of issuance, extent of the amount of issuance and terms and conditions of the securities.

San Miguel operates food, beverage, packaging, power, fuel and oil, infrastructure and telecommunications businesses. It is based in Mandaluyong City, Philippines.

Also looking ahead, the Republic of Estonia plans to price a euro-denominated benchmark offering of 10-year notes soon, subject to market conditions, according to a syndicate source on Tuesday.

The sovereign has mandated Citigroup, Nordea and Societe Generale to arrange the Regulation S deal.

A global investor call is scheduled for June 2, and the issuer is available for calls with investors individually.

Beyond sovereign and corporate debt, the supranational Corporacion Andina de Fomento (CAF) priced a chunky €700 million of 1 5/8% five-year Covid-19 response social bonds at 99.938 on Wednesday to yield 1.638%, or mid-swaps plus 190 basis points, according to a syndicate source.

Pricing was tightened from initial talk in the area of mid-swaps plus 200 bps.

Order books closed in excess of €950 million when the final spread was set and the issue launched.

BNP Paribas Securities Corp., BofA Securities, Inc. and Credit Agricole CIB were joint lead managers for the Regulation S notes.

Proceeds of the notes will be used to finance such things as health system and emergency economic support as stipulated under CAF’s social bond framework.

The Caracas, Venezuela-based development bank finances projects in the public and private sectors with an eye toward sustainable development and regional integration.

Tencent prices $6 billion

Tencent priced $6 billion of notes in four tranches (A1/A+/A+), according to an announcement from the company.

Tencent priced $1 billion of 1.81% notes due Jan. 26, 2026 at 99.988, $2.25 billion of 2.39% notes due June 3, 2030 at 99.973, $2 billion of 3.24% notes due June 3, 2050 at 99.943 and $750 million of 3.29% notes due June 3, 2060 at 99.934.

BofA Securities Inc., HSBC and Morgan Stanley & Co. International plc were the joint global coordinators.

Joining them were Goldman Sachs (Asia), Bank of China (Hong Kong), Mizuho Securities Asia, Barclays, Credit Suisse (Hong Kong) Ltd., Deutsche Bank AG, Singapore Branch, ICBC (Asia) Ltd., J.P. Morgan Securities plc and SPDB International Capital Ltd. as the managers for the issue.

Proceeds will be used for refinancing and general corporate purposes.

The notes were sold under Tencent’s medium-term note program.

The company priced an additional $6 billion of notes in five tranches as recently as April 3. After the new issue settles on June, the company will have $18 billion outstanding under its program.

Tencent is an investment holding company based in Shenzhen, China.

Petrobras brings $3.25 billion

Petrobras priced $1.5 billion of 5.6% senior notes due 2031 at 99.993 to yield 5.6%, according to an FWP filing with the Securities and Exchange Commission.

The company also priced $1.75 billion of 6¾% senior notes due 2050 at 98.11 to yield 6.9%, according to a separate FWP filing with the SEC.

BNP Paribas Securities, BofA Securities, Itau BBA USA Securities, Inc., J.P. Morgan Securities LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc. are the bookrunners for the SEC-registered deal.

The energy company is based in Rio de Janeiro.

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