Emerging Markets: Uruguay prices dual currency tranches; eustream sells €500 million

By Rebecca Melvin

New York, June 26 – A mix of sovereign and corporate bond issuers tapped the emerging markets debt market this past week, with a greater diversity in regions represented and slightly more volume than the previous week. However, pricings tapered off and all but stopped on Friday.

There were 28 hard-currency emerging markets deals, totaling $14.748 billion this past week, which compares to 30 emerging markets deals in $13.098 billion of volume for the previous week ended June 19, according to Prospect News’ data.

Issuers ranged from a gas transmission company based in Bratislava, Slovakia, to a Phnom Penh, Cambodia-based hotel, gaming and leisure operator to a Montevideo, Uruguay-based maritime logistics and storage services provider.

Among sovereign issuers, the Republic of Uruguay priced two tranches in two currencies including an add-on in U.S. dollars and a Uruguayan peso-denominated series payable in dollars.

And Trinidad and Tobago priced $500 million of 4½% 10-year senior notes (Ba1/BBB-) at a spread of Treasuries plus 380 basis points.

Initial price talk was at the high 4% area and the 487.5 bps spread area.

Credit Suisse Securities (USA) LLC was the bookrunner.

The Uruguay deal included UYU 68,505,600,000 of 3 7/8% Uruguayan inflation global bonds due 2040 and the $400 million add-on to its 4 3/8% bonds due 2031, according to filings with the Securities and Exchange Commission.

The 2040 tranche of 3 7/8% UI global bonds priced at par. The nominal principal amount repaid in each installment for the peso-denominated notes will be adjusted to reflect Uruguayan inflation from the issue date and will be converted to and paid in dollars at an exchange rate of 42.816 Uruguayan pesos per dollar.

The $400 million add-on to the 4 3/8% bonds priced at 115.895 for a reoffered yield of 2.481%, or a spread over U.S. Treasuries of 180 bps.

There are $1,466,969,673 principal amount of the bonds outstanding, having initially priced on Oct. 2, 2019 with an add-on tranche priced on Jan. 23.

Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and Itau BBA USA Securities Inc. are joint bookrunning managers of both tranches.

Uruguay intends to use a portion of the proceeds of the sale of the bonds to partially finance the implementation of measures designed to support economic activity and employment and protect vulnerable sectors, including Covid 19-related government response, with the remainder for general purposes, including financial investment and the refinancing, repurchase or retiring of domestic and external debt, such as any validly tendered and accepted existing bonds.

Corporate deals

Among corporate issuers, Cambodia’s NagaCorp Ltd. sold $350 million 7.95% senior notes (B1/B+) due July 6, 2024 on Wednesday. Credit Suisse (Hong Kong) Ltd., Morgan Stanley & Co. International plc and UBS AG Hong Kong Branch are the joint global coordinators, joint bookrunners and joint lead managers for the Regulation S offering.

ChenLipKeong Capital Ltd. subscribed for $45 million principal amount of the notes, constituting a connected transaction. The notes were issued to the SPV at 98.167.

The company intends to use the proceeds from the new notes to redeem some or all of its outstanding notes due 2021 at or prior to maturity and for general corporate purposes.

The hotel, gaming and leisure operator is based in Phnom Penh, Cambodia.

Slovakia’s eustream, as issued €500 million of 1 5/8% notes due 2027.

The notes are listed on Euronext Dublin.

And Navios South American Logistics Inc. and Navios Logistics Finance (US) Inc. priced a $500 million issue of five-year senior secured notes (B3/B) at par to yield 10¾% on Tuesday. Bookrunners were BofA Securities Inc., Morgan Stanley & Co., Deutsche Bank Securities Inc. and Jefferies LLC.

The yield printed at the tight end of the 10¾% to 11% yield talk.

The Montevideo, Uruguay-based maritime logistics and storage services provider plans to use the proceeds to satisfy and discharge the indenture governing its outstanding 2022 senior notes and to pay off its term loan B.

For China, Beijing-based China Construction Bank Corp. sold $2 billion of 2.45% tier 2 dated capital bonds due 2030, according to a notice of listing on the Stock Exchange of Hong Kong Ltd.

The bonds are non-callable until June 24, 2025, at which time the bond’s interest rate will be adjusted in accordance with the terms set out in the bonds.

China Construction Bank (Asia), CCB Europe, J.P. Morgan, HSBC, Credit Agricole CIB, CLSA and SMBC Nikko are the joint bookrunners and joint lead managers of the deal.

Listing is expected on Friday.

Bank of China (Hong Kong) Ltd. priced $1 billion of notes (A/A) in two tranches, according to a listing notice.

The deal included $400 million of floating-rate notes due 2023 and a second tranche of $600 million 1¼% notes due 2025.

The notes were issued under the Hong Kong-based bank’s $40 billion medium-term note program.

Proceeds will be used for general corporate purposes.

Joint global coordinators were Bank of China, Credit Agricole CIB, HSBC and J.P. Morgan.

Joining them as joint lead managers and joint bookrunners were Agricultural Bank of China Ltd., Hong Kong Branch, ANZ, Bank of Communications, Barclays, BofA Securities, China Construction Bank (Asia), China Everbright Bank Hong Kong Branch, China International Capital Corp. China Minsheng Banking Corp., Ltd., Hong Kong Branch, Citigroup, Goodbody, ICBC, Standard Chartered Bank, Shanghai Pudong Development Bank Hong Kong Branch and Wells Fargo Securities.

China Aoyuan Property Group Ltd. priced $460 million 6.35% senior notes due Feb. 8, 2024 at 99.988 on Wednesday, according to a company announcement.

The notes are callable at par plus accrued interest before Feb. 8, 2023 and after Feb. 8, 2023 at 102 plus interest.

BofA Securities, the Bank of East Asia Ltd., China Citic Bank International, China International Capital Corp., Credit Suisse, Deutsche Bank, Goldman Sachs (Asia) LLC, Haitong International, HSBC and UBS are the joint lead managers and joint bookrunners of the Regulation S notes.

The proceeds will be used to refinance the group’s offshore debt and for general working capital.

China Aoyuan is real estate developer based in Guangzhou, China.

China’s New Oriental Education & Technology Group Inc. priced $300 million of 2 1/8% five-year senior notes, according to a news release Wednesday.

BofA Securities and UBS AG Hong Kong Branch are joint bookrunners for the Regulation S notes.

Proceeds will be used for general corporate purposes.

Based in Beijing, New Oriental provides private educational services in China.

And Fuqing Investment Management Ltd. priced $500 million of 3¼% guaranteed bonds due 2025, according to a regulatory notice.

The Regulation S notes were sold via joint lead managers and bookrunners China Citic Bank International Ltd., HSBC, Guotai Junan Securities (Hong Kong) Ltd., Deutsche Bank AG, Hong Kong Branch, USB AG Hong Kong Branch, Mizuho Securities Asia Ltd. and CMB Wing Lung Bank Ltd.

The investment services company is based in China.

In addition, Industrial Bank of Korea issued $500 million of 1.04% notes due 2025 on Monday, according to a notice.

Citigroup Global Markets, IBK Securities Co., Ltd, Credit Agricole CIB, Hongkong and Shanghai Banking Corp. Ltd., J.P. Morgan Securities plc, Merrill Lynch International and Societe Generale are bookrunners for the Regulation S and Rule 144A offering.

The industrial bank is based in Seoul, South Korea.

For the Central & Emerging Europe and Russia region, PJSC Gazprom priced $1 billion seven-year loan participation notes (//BBB) at par, according to a post-stabilization notice.

Gazprom subsidiary Gaz Finance plc is issuing the fixed-rate notes under Regulation S with a Euronext Dublin exchange listing expected.

J.P. Morgan Securities plc, Banca IMI, Natixis and VTB Capital are managers of the deal.

The natural gas producer is based in Moscow.

For the Middle East, Sharjah Islamic Bank PJSC issued $500 million 2.85% five-year bonds through SIB Sukuk Co. III Ltd., according to market sources.

The order book for the bonds was more than $3.4 billion.

Bank ABC, Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, Islamic Corp. for the Development of the Private Sector, KFH Capital Investment Corp., Mashreqbank and Standard Chartered Bank were the bookrunners.

The lender is based in the emirate of Sharjah in the United Arab Emirates.

And for Latin America, Fomento Economico Mexicano SAB de CV priced a $700 million add-on to its 3½% 30-year senior notes (A-/A) at 102.62 to yield 3.358%, or 190 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes are an add-on to the $1.5 billion of notes issued on Jan. 16 and the $300 million add-on issued on Feb. 12.

Citigroup Global Markets, Goldman Sachs & Co. LLC and Morgan Stanley & Co. are joint bookrunners.

Proceeds will be used for general corporate purposes.

Femsa is a Monterrey, Mexico-based Coca-Cola bottler.

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