BGK, Israel Chemicals, Logan price deals; Latvia, Kexim on deck; low-beta names holding in

By Rebecca Melvin

New York, May 23 – In the emerging markets debt primary on Wednesday Poland’s Bank Gospodarstwa Krajowego priced €1 billion of notes in two tranches, Israel Chemicals Ltd. priced $600 million of 6 3/8% 20-year notes, Logan Property Holdings Co. Ltd. priced a $100 million add-on to its 6 7/8% senior notes, while the Republic of Latvia and the Export-Import Bank of Korea each announced dual tranches of notes.

“The market is still open if issuers are willing to pay a bit more in concession,” a market source said of emerging markets.

The secondary market continued to be marked by differentiation. Argentina and Colombia were underperforming, Turkey was mixed as the lira dropped again, and Chile, Mexico and Peru – low-beta names – outperformed, a New York-based source, focused on Latin America, said.

Idiosyncratic stories are helping drive investors’ choices, and Colombia’s weakness may have been tied to its national elections, the source said.

Petroleos Mexicanos’ long 6¾% notes due 2047 were trading actively and ended the session at about 96 3/8, which is higher by 2 points in the last couple of sessions. Pemex’s 2046 notes were also active and ended at 85, which was up about 1.5 points in the last few sessions.

The Turkish lira dropped as much as 5% on Wednesday to a fresh low, adding to the currency’s steep slide as investors reject the Turkish central bank continuing to stand pat on interest rates despite high inflation.

The lira is down more than 20% against the dollar so far this year.

Meanwhile, the minutes of the last meeting of the Federal Open Market Committee were published on Wednesday, revealing a dovish sentiment and giving a boost to risk sentiment as fed officials seem willing to let inflation overshoot their 2% target, a source said.

BGK prices on top of talk

Poland’s BGK priced €500 million 1 3/8% 2025 notes at 99.722 to yield 1.417% or mid-swaps plus 75 basis points. Final pricing was unchanged from initial price talk.

The €500 million of 2% 2030 notes priced at 98.740 to yield 2.12%, or mid-swaps plus 95 bps, which was also unchanged from initial talk.

The order books was not significantly oversubscribed but reported to be more than €1 billion at the time of launch.

Proceeds will be used to fund the National Road Fund Law.

BGK, Deutsche Bank, HSBC, JPMorgan and Societe Generale CIB are bookrunners of the dual tranches being sold under Regulation S.

Israel Chemical upsizes deal

Israel Chemicals priced $600 million of 6 3/8% 20-year notes (expected ratings: /BBB-/BBB-) at par on Wednesday, according to a release.

The deal size was increased from $500 million initially talked, pricing was tightened from 6½% area, and the maturity came at the short end of the 20- to 30-year range being considered.

Proceeds are being used to repay existing debt and replace cash on hand following the repurchase of its 2024 notes.

BofA Merrill Lynch, Barclays, BNP Paribas and HSBC were the joint lead managers and bookrunners for the Rule 144A and Regulation S offering.

Logan adds to April deal

Shenzhen-based real estate development company Logan Property priced a $100 million add on to its 6 7/8% senior notes due 2021 (//BB-) at 98.388.

The original $300 million of notes priced on April 18 at 99.667.

Proceeds will be used to refinance debt for general corporate purposes.

Credit Suisse, Deutsche Bank, Guotai Junan International, Haitong International, Standard Chartered Bank, China Industrial Securities International, China Minsheng Banking Corp., Ltd., Hong Kong Branch, VTB Capital and Orient Securities (Hong Kong) were the bookrunners for the Regulation S sale.

Latvia, Kexim to price

Latvia is offering a dual tranche of euro-denominated notes including a new 10-year note and a tap of its existing 2¼% notes due 2047, while Kexim is planning to issue a dual tranche of dollar-denominated floating-rate notes.

Latvia’s new notes were guided to a yield of mid-swaps plus 15 bps, which was the tight end of initial talk at mid-swaps plus 15 bps to 20 bps.

The reopening of the 2047 notes, of which €500 million priced originally in February 2017, was guided to mid-swaps plus 37 bps from initial talk at mid-swaps plus 40 bps area.

J.P. Morgan Securities plc, Citigroup and Natixis are stabilizing managers for the deal.

Seoul-based lender Kexim is bringing its floating-rate notes to fund general operations. The deal is being sold via Citigroup, ING, J.P. Morgan, Korea Development Bank, Morgan Stanley and Societe General CIB as joint bookrunners and lead managers for the Securities and Exchange Commission-registered deal, and Kexim Bank (UK) Ltd. is co-manager.

© 2015 Prospect News.
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