Emerging Markets: Abu Dhabi, Kuwait’s NBK, Vakiflar, PhosAgro price deals: Bidvest on tap

By Rebecca Melvin

Concord, N.H., Sept. 10 – The first full week of September, which brought the markets close to the middle of the month, saw a strong uptick of primary market activity in emerging markets debt, with Thursday being the key day on which many issuers pulled the trigger on planned deals around the globe.

Abu Dhabi announced a $3 billion offering of fixed-rate senior notes in two tranches on Thursday. Pricing of the emirate’s deal came at an impressively tight spread of 63 basis points over Treasuries for its 10-year paper. The 30-year tranche came at a spread of 105.6 bps over Treasuries.

Also on Thursday, National Bank of Kuwait SAKP (NBK) priced $1 billion of 1 5/8% six-year senior notes; Turkiye Vakiflar Bankasi TAO (Vakifbank) priced $500 million of 5½% five-year senior sustainability notes (expected rating: //B+); Russia’s PJSC PhosAgro priced $500 million of 2.6% seven-year eurobonds (expected ratings: Baa3/BBB-/BBB-); and Chile’s Alfa Desarrollo SpA sold $1.1 billion of 4.55% 30-year bonds (Baa3/BBB-) at par.

And there is more to come. Among deals going up on the forward calendar was South Africa’s Bidvest Group Ltd., which has selected banks to present its inaugural dollar-denominated senior benchmark bond with a seven-year term (expected rating: //BB).

Chilean issuance was strong this past week, with Entel, Enap and EFE pricing deals in addition to Alfa Desarrollo on Thursday. All of the deals saw pricing tightened. There was also quasi-sovereign debt sold by the subway system operator Empresa de Transporte de Pasajeros Metro SA, which priced a 40-year benchmark.

Chile’s Empresa Nacional de Telecommunicaciones SA (Entel) sold $800 million of 3% bonds in the Thursday market, and Chilean refiner Empresa Nacional del Petroleo (ENAP) sold $560 million of 3.45% 10-year notes (Baa3//A-) in the Thursday primary market. Meanwhile, Empresa de los Ferrocarriles del Estado (EFE) sold $500 million of 3.83% bonds on Tuesday.

Abu Dhabi pricing tightens

Emirate of Abu Dhabi priced $3 billion of fixed-rate senior notes in two tranches.

Abu Dhabi priced $1.75 billion of 1 7/8% 10-year notes at 99.178, with a Treasuries plus 63 bps spread.

Additionally, the deal included $1.25 billion of 3% 30-year notes which priced at par, or a spread of Treasuries plus 105.6 bps.

The 10-year notes had been talked with a spread in the Treasuries plus 90 bps area, and the 30-year notes had been talked with a spread in the Treasuries plus 130 bps area, according to a market source.

J.P. Morgan Securities plc, BNP Paribas, First Abu Dhabi Bank, Morgan Stanley and Standard Chartered Bank are the managers.

The notes will be listed on the London Stock Exchange and Abu Dhabi Securities Exchange.

NBK sells six-year notes

National Bank of Kuwait priced $1 billion of 1 5/8% six-year senior notes with an initial yield of Treasuries plus 95 bps, a syndicate source said.

Spread talk was in the area of Treasuries plus 115 bps.

The notes are non-callable for five years, and the rate resets at SOFR plus 105 bps.

The notes are being issued by NBK SPC Ltd.

J.P. Morgan Securities plc, Citigroup Global Markets Ltd., Watani Investment Co. KSCC (NBK Capital), Goldman Sachs International, HSBC Bank plc, Merrill Lynch International, MUFG Securities EMEA plc and Standard Chartered Bank are managers for the deal, which will be listed on the Irish Stock Exchange.

The bank is based in Kuwait City.

Vakifbank brings green bond

Turkey’s Vakifbank priced $500 million of 5½% five-year senior sustainability notes (expected rating: //B+), according to a market source.

The notes were priced at 99.454 to yield 5 5/8%, or a spread of 484.8 bps over U.S. Treasuries.

The securities are being issued under the lender’s $7 billion global medium-term note program, and application has been made for listing on Euronext Dublin from Sept. 16.

Citigroup Global Markets Ltd., Erste Group Bank AG, ICBC Standard Bank plc, J.P. Morgan Securities plc, MUFG Securities EMEA plc, QNB Capital LLC and Societe Generale are joint bookrunners of the Rule 144A and Regulation S deal.

PhosAgro sees strong reception

PhosAgro priced $500 million of 2.6% seven-year eurobonds (expected ratings: Baa3/BBB-/BBB-) on Thursday. Pricing came below talk for yield in the 2¾% area, which was revised from the 3¼% area.

The proceeds will be used for general corporate purposes and loan portfolio refinancing to maintain PhosAgro’s net debt/EBITDA ratio at a comfortable level.

Demand for the bonds outstripped the planned offering size, according to the release.

BofA Securities, Citigroup, Gazprombank, JPMorgan, Raiffeisen Bank, Renaissance Capital, Sberbank CIB, UniCredit and VTB Capital acted as joint bookrunners for the deal, which is expected to be listed on Euronext Dublin.

PhosAgro is a Moscow-based chemical holding company.

Chilean issuers pile on

Alfa Desarrollo sold $1.1 billion of 4.55% 30-year bonds at yield, which came lower than talk in the low 5% area.

Citigroup, JPMorgan, Santander and SMBC were bookrunners for the Rule 144A and Regulation S offering, for which proceeds are meant to buy transmission assets from Chilean utility company Colbun SA.

Chile’s Alfa Desarrollo is a consortium led by Dutch pension fund APG Energy and Infra Investments.

Chile’s Entel sold $800 million of sustainable bonds (BBB-/BBB-) due 2032. They priced tight to initial talk at a spread of Treasuries plus 175 bps, compared to talk in the low 200 bps area.

The Rule 144A and Regulation S notes will be used for eligible green and eligible social projects, and also to fund the tender offer for the company’s 4 7/8% notes due 2026.

BNP Paribas Securities Corp. and J.P. Morgan Securities LLC were bookrunners.

ENAP sold $560 million of 3.45% 10-year notes (Baa3//A-) in the Thursday primary market. The notes priced with a spread of 220 bps over the relevant benchmark Treasury, low to talk in the Treasuries plus 250 bps area.

BofA Securities, Goldman Sachs, Mizuho, Santander and Scotia are bookrunners for the Rule 144A and Regulation S transaction.

The notes will be used to refinance the $410 million of senior notes due in December, according to Fitch Ratings, and for general corporate purposes.

Chile’s EFE sold $500 million of 3.83% bonds on Tuesday.

Bidvest plans seven-year paper

Bidvest Group is guaranteeing seven-year non-call two-year paper being marketed by a bevy of transnational bookrunners. They include BofA Securities, Barclays, BNP Paribas, Citigroup, Absa Rand Merchant Bank and Standard Bank.

The joint bookrunners are holding a global investor call on Monday with a series of fixed-income investor calls to begin later the same day. The planned Rule 144A and Regulation S deal for the Johannesburg-based business-to-business services company is expected to follow those meetings, is subject to market conditions.

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