Emerging markets: Indonesia, Turkey, Chile, Hungary, Serbia price deals; Bidvest taps market

By Rebecca Melvin

Concord, N.H., Sept. 17 – Issuers got off to a busy start early this past week in emerging markets, and sovereign issuers, in particular, were a feature as were a number of Chilean issuers and a variety of other deals, according to Prospect News’ data.

Among sovereign issuers were Indonesia, Turkey, Chile, Hungary and Serbia.

Corporate issuers also waded into the market this week, including Chile’s Sociedad Quimica y Minera de Chile SA, which sold $700 million of 3½% notes due 2051 (Baa1/BBB+) on Monday with a spread over Treasuries of 165 basis points. The Santiago, Chile-based company produces specialty fertilizers, iodine and lithium.

Industrial Bank of Korea sold $500 million of three-year senior sustainability notes on Monday. That paper priced with a 0.625% coupon for a spread of 20 bps over Treasuries, compared to initial talk in the Treasuries plus 50 bps area.

Also on Monday, a unit of Russia’s Tinkoff Bank priced $600 million perpetual subordinated additional tier 1 loan participation notes (expected ratings: B3//B-) at par with a 6% coupon.

Hong Kong-based real estate developer Shimao Group Holdings Ltd. priced $1.05 billion of senior notes in two tranches, according to a term sheet.

The first tranche consists of $300 million 3.975% senior notes due Sept. 16, 2023, sold at par.

Additionally, the company priced a tranche of $748 million 5.2% senior notes due Jan. 16, 2027, priced at 99.777.

On Wednesday, Nigeria’s Access Bank plc announced it had priced $500 million of five-year fixed-rate senior notes at par. The commercial bank is based in Lagos, Nigeria.

Also on Wednesday, Bangkok Bank PCL priced $1 billion of 3.466% 15-year notes with a Treasuries plus 215 bps spread, according to a market source.

The notes launched with talk of a spread of Treasuries plus 215 bps after initial price talk in the Treasuries plus 250 bps area.

The maturity date of the notes is Sept. 23, 2036.

The notes will come with 10 years of call protection.

And on Friday, South Africa’s Bidvest Group (UK) plc announced it priced $800 million five-year notes (expected rating: Ba2//BB) at par to yield 3 5/8%, according to a syndicate source.

Bidvest Group Ltd. will guarantee the notes, which are non-callable for two years. In year three, they are callable at 101.813 and 50% make-whole; in year four, they are callable at 100.906 and 25% make-whole; and after year four, they are callable at par.

There is also a change-of-control put at 101.

BofA Securities, Barclays, BNP Paribas, Citigroup, Absa Rand Merchant Bank and Standard Bank were joint bookrunners of the Rule 144A and Regulation S deal.

The proceeds are earmarked to fund repayment of revolving credit facility drawings in a new syndicated facility, to repay local currency bonds and for general corporate purposes, which may include future bolt-on acquisitions.

The business-to-business services, trading and distribution group is based in Johannesburg.

Serbia was not the only issuer from the Central & Eastern Europe region in the market. Looking ahead, Poland’s mBank SA plans to price €500 million six-year green senior notes (expected ratings: /BBB-/BBB-), according to a pre-stabilization notice on Wednesday.

mBank will be offering dual tranches under Rule 144A and Regulation S.

The notes due Sept. 21, 2027 are non-callable for five years.

The notes are being priced under the issuer’s euro medium-term note program.

The notes have an early redemption option and a reset margin over three-month Euribor.

Commerzbank, Erste Group Bank, UBS Europe and UniCredit Bank are managers of the deal.

The insurance company is based in Poland.

Also in the market is Phillipines’ Ayala Corp., which announced on Friday that wholly owned subsidiary AYC Finance Ltd. priced $400 million of 3.9% senior fixed-for-life perpetual notes guaranteed by Ayala.

The notes priced at par with a fixed coupon of 3.9% for life with no step-up and no reset. The coupon is 40 bps lower than initial price guidance of 4.3%.

BPI Capital Corp., Citigroup Global Markets Singapore Pte. Ltd., Credit Suisse (Singapore) Ltd., J.P. Morgan (SEA) Ltd., Mizuho Securities (Singapore) Pte. Ltd. and UBS AG Singapore Branch acted as joint lead managers and joint bookrunners for the Regulation S offering.

Proceeds will be used to refinance AYC Finance’s 5 1/8% senior fixed-for-life notes and 4.85% senior fixed-for-life notes through a tender offer set to expire on Sept. 24.

Funds from the new notes will also be used to refinance other dollar-denominated obligations.

Ayala is a Makati City, Philippines-based conglomerate.

Singapore-based United Overseas Bank Ltd. (UOB) priced £850 million of floating-rate covered bonds (Aaa/AAA) with a five-year tenor at 103.52, according to an announcement and a press release on Tuesday.

The bonds will be issued under the bank’s $8 billion global covered bond program and guaranteed by Glacier Eighty Pte. Ltd.

The bonds were priced with a floating interest rate of Sonia, compounded daily, plus 100 bps, with a reoffer yield of Sonia plus 29 bps. Interest will be paid quarterly.

The final order book was in excess of £975 million.

According to the press release, UOB is the first issuer in Singapore to price a Sonia-linked bond offering, and the offering is also the largest sterling-denominated bond from an Asian issuer. The expected issue date is Sept. 21, and the bonds are expected to be listed on the Singapore Exchange.

And among local currency deals, Latin America’s Bancolombia SA said it plans to price a public offering of sustainable ordinary bonds totaling COP 600 billion.

The bonds will be offered in three subseries with maturities of three, five and 12 years.

This will be the bank’s first issue of sustainable ordinary bonds and the second issue under its COP 3 trillion issuance program that covers ordinary bonds, green bonds, social bonds, sustainable bonds, orange bonds and subordinated bonds.

Proceeds from the sustainable bonds will be used to finance projects that meet certain eligibility criteria relating to renewable energy, energy efficiency, sustainable construction, circular economy, affordable housing, social infrastructure and empowerment of women.

The lender is based in Medellin, Colombia.

Sovereign issuers active

Indonesia sold a three-part bond offering (Baa2/BBB/BBB) on Monday, according to multiple FWP filings with the Securities and Exchange Commission and additional details from a market source.

The republic sold two dollar-denominated tranches.

The first dollar tranche for $600 million in a reopening tap of the republic’s 2.15% bonds due July 28, 2031 priced at 99.734 to yield 2.18%. Talk had been for a yield in the 2½% area.

The reopening will be combined with the original $600 million of bonds issued on July 28.

The second dollar tranche of $650 million of 3.2% bonds with a 40-year tenor priced at 98.225 to yield 3.28%. The notes priced with a spread of 138.2 bps over the related U.S. Treasury. Talk had been in the 3.6% area.

The republic also sold euro-denominated notes. A €500 million series due March 23, 2034 priced with a 1.3% coupon at 99.419 to yield 1.351%. The spread priced at Bunds plus 168.2 bps, or mid-swaps plus 118 bps.

The notes can be redeemed early at par plus interest, three months before the maturity date.

Proceeds will be used to repurchase existing bonds under a tender offer.

Turkey sold $2.25 billion of global notes in two tranches on Monday. The issuance included a $750 million tap of its 6 1/8% notes due Oct. 24, 2028 and $1.5 billion of new 6½% notes due Sept. 20, 2033, according to an FWP filing with the Securities and Exchange Commission.

The tap of 2028 notes priced at 102.445 for a yield to maturity of 5.7% and a 459.6 bps spread over U.S. Treasuries. The existing notes were issued on April 24, 2018, and now the deal size is $2.75 billion.

The new 12-year notes priced at par for a spread of 517.9 bps over Treasuries.

On Tuesday, the Chile sold $1 billion of 3.25% 50-year notes at a spread of Treasuries plus 158 bps and €918 million 0.555% green notes due 2029 (expected ratings: A1/A/A-).

Talk for the Chilean dollar notes was in the 190 bps area over Treasuries.

Proceeds will be used for eligible social expenditures under the republic’s sustainable bond framework.

Possible social expenditures may include the following: support for the elderly or people with special needs in vulnerable situations, support for low-income families, support for human rights victims, support for the community through job creation, access to affordable housing, access to education, food security, access to essential health services, and social programs designed to prevent and/or alleviate unemployment derived from socioeconomic crises, including through the potential effect of financing SMEs and micro finances.

Application will be made to the London Stock Exchange for the listing of the notes.

Concurrently, the republic sold euro-denominated green notes at par for a spread of 70 bps over mid-swaps.

Hungary sold $4.25 billion of bonds in two parts on Tuesday, including $2.25 billion of 2 1/8% 10-year bonds with a spread of Treasuries plus 100 bps, low to talk in the Treasuries plus 130 bps area.

A $2 billion 30-year tranche was sold with a 3 1/8% coupon for a spread of Treasuries plus 150 bps, 30 bps lower than talk in the Treasuries plus 180 bps area.

On Friday, Serbia priced two tranches including €1 billion of green notes, marking its inaugural issue in the green market, and €750 million of new conventional notes, according to a syndicate source on Friday.

The tranche of seven-year 1% green notes priced at 98.355 for a yield of 1.262% or a spread of 140 bps over mid-swaps.

The tranche of 15-year 2.05% conventional notes priced at 96.797 for a yield of 2.305% and a spread of 200 bps over mid-swaps.

The proceeds of the green notes will be used to finance or refinance eligible green expenditures.

© 2015 Prospect News.
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