Primary sees BTG Pactual, Ghana, Icici, UT Capital; Russian bonds unhurt by new EU sanctions

By Christine Van Dusen

Atlanta, Sept. 11 – Brazil’s Banco BTG Pactual, Ghana, India’s Icici Bank Ltd. and China’s UT Capital Group sold notes on Thursday as the European Union announced plans to implement new sanctions against Russia for the sovereign’s actions in Ukraine.

“State Russian banks will not be able to access loans, but bond financing has already been banned – and banks were hardly keen to issue loans anyway – so this shouldn’t have much of an impact on spreads,” a trader said.

The EU will review the ceasefire by the end of the month and could repeal some or all of the sanctions if the ceasefire appears to be holding.

On Thursday morning, Russian credit default swaps spreads tightened by 3 basis points as most quasi-sovereign bonds performed well, a London-based analyst said.

“We have seen particular demand of the 2022 to 2023 area, likely driven by short covering,” he said.

Also impacting market sentiment on Thursday was speculation that Russia has sent less gas to Poland in retaliation for the latter sovereign’s gas exports into Ukraine.

“[OAO Gazprom] claimed it was likely due to a technical fault or maintenance work,” the analyst said.

In other news from Gazprom, the company reported first-quarter revenues that rose 6.7%, in line with estimates. But this isn’t expected to have a material impact on spread performance, given the events of recent months.

“Gazprom bonds have widened anywhere from 60 bps to 187 bps since the United States’ first sanctions Rosneft and Novatek,” the analyst said. “The euro bonds have been particularly badly hit, with the euro 2017s 187 bps wider.”

Among Gazprom’s dollar-denominated notes, the 2015s and 2016 have suffered the most, he said.

In other trading on Thursday morning, bonds from Turkey improved while sellers emerged for GarantiBank International NV.

Bahrain trades up

Recent new issues have fared well in the secondary market, with Bahrain’s 30-year notes trading about 1¾ points above reoffer, a trader said.

The 6% notes due 2044 priced Wednesday at par via Citigroup, Gulf International Bank, MUFG and Standard Chartered Bank in a Rule 144A and Regulation S deal.

“Balanced flow overall, and two-way here,” he said. “The secondary curve was fairly well behaved, with spreads unchanged there, but tighter on the 2020, 2022 and 2023.”

Demand for Sharjah

The new issue of notes from the Emirate of Sharjah – 3.764% Islamic bonds due 2024 that priced at par – was seen about 1.3 points above reoffer on Thursday amid very strong demand.

HSBC, Kuwait Finance House, National Bank of Abu Dhabi, Sharjah Islamic Bank and Standard Chartered Bank were the bookrunners for the Regulation S deal.

“Sharjah continues to be popular, with more good volumes occurring between 101.18 and 101.28,” a trader said. “Feels like a couple of larger accounts are building a nice position on this one.”

Emirates NBD declines

The new issue of 6 3/8% perpetual notes from Dubai’s Emirates NBD ticked down 0.2 points after pricing at par, the trader said.

Morgan Stanley and Standard Chartered Bank were the joint global coordinators, and Citigroup, Commerzbank, Deutsche Bank, Emirates NBD Capital, Morgan Stanley and Standard Chartered Bank were the joint lead managers for the Regulation S deal.

BTG Pactual prices bonds

Brazil’s Banco BTG Pactual priced $1.3 billion 8¾% perpetual notes at par to yield 8¾%, matching price talk, a market source said.

BB Securities, BofA Merrill Lynch, Bradesco, BTG Pactual, Citigroup and Santander were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used to increase capital.

The lender is based in Sao Paulo.

Ghana sells notes

Ghana printed a $1 billion issue of 8 1/8% notes due Jan. 18, 2026 at 99.1610, a market source said.

The notes were talked at a yield in the 8 3/8% area.

The notes will amortize in three equal installments, in January of 2024, 2025 and 2026.

Barclays, Deutsche Bank and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

The bond will be Ghana’s third international placement since its $750 million debut bond in September 2007 and a $750 million bond issued in July 2013.

Proceeds will be used primarily for government capital expenditures, with the rest used to repay outstanding short-term domestic debt.

Icici prints notes

India’s Icici Bank priced a $500 million issue of 3.57% notes due March 18, 2020 (Ba2/BBB-/) at 99.653 to yield Treasuries plus 180 bps, a market source said.

BofA Merrill Lynch, Citigroup, Deutsche Bank and HSBC were the bookrunners for the deal.

Icici Bank is based in Mumbai.

Issuance from UT Capital

China’s UT Capital Group priced RMB 1.6 billion 5.6% notes due in 2017 at par to yield 5.6%, a market source said.

HSBC, Standard Chartered Bank, Haitong International, ICBC International and Bank of China International were the bookrunners for the Regulation S deal.

The proceeds will be used for working capital and general corporate purposes.

UT Capital Group is a unit of Haitong Securities.

El Salvador gives guidance

El Salvador set price talk in the 6¾% area for its planned issue of benchmark-sized and dollar-denominated notes due in 12 years (Ba3/BB-/BB-), a market source said.

Citigroup and Deutsche Bank are the bookrunners for the Rule 144A and Regulation S deal.

Nonghyup Bank sets roadshow

Korea’s Nonghyup Bank has mandated BofA Merrill Lynch, Credit Agricole CIB, Deutsche Bank, HSBC, Mizuho Securities and Standard Chartered Bank to arrange a roadshow during the week of Sept. 15, a market source said.

An issue of notes may follow.

Nonghyup Bank is a Seoul, South Korea-based agricultural and commercial credit and banking services company.

Chinese corporate sells bonds

On Wednesday, China Great Wall Asset Management Corp. printed $500 million 2½% notes due Sept. 17, 2017 at 99.502, a market source said.

Bank of China, Standard Chartered Bank and Guotai Junan International were the joint global coordinators. Bank of China, Standard Chartered Bank, Guotai Junan International, CCB International, ICBC (Asia), Agricultural Bank of China, ABC International, Deutsche Bank, Credit Suisse, HSBC and Wing Lung Bank were the lead managers and joint bookrunners for the Regulation S deal.

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