Week in review: Panama prices $2.5 billion of bonds; Ecuador, NMC Health in focus

By Rebecca Melvin

New York, March 27 – The Republic of Panama managed to price $2.5 billion of 4½% global bonds due 2056 at par on Thursday, representing one of only a handful of deals to get done this past week in emerging markets as all eyes focus on the chaos that the Covid-19 pandemic is wreaking on global markets.

Panama’s notes were priced via underwriters Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC. The central American country was joined by a couple of names in Emerging Europe in the primary market.

Slovenia priced €1.1 billion in dual tranches on Tuesday, including €850 million of new three-year notes and a €250 million tap of its 1.1875% notes due March 14, 2029.

The 0.2% notes due 2023 priced at 99.842 to yield 0.253%, or a yield spread of mid-swaps plus 50 basis points. The notes were initially talked at mid-swaps plus 50 bps area.

The €250 million tap of 1.1875% notes due 2029 priced at 104.262 to yield 0.695%, or a yield spread of mid-swaps plus 65 bps. The deal was talked at a yield in the mid-swaps plus 65 bps area.

The order books for the two issues stood in excess of €1.73 billion at the time of launch, with orders in excess of €1.35 billion for the 2023 notes at that time.

Barclays, BNP Paribas, Commerzbank, Credit Agricole CIB, Goldman Sachs International Bank and HSBC were bookrunners for the Regulation S transactions.

The Republic of Latvia priced a €550 million tap of its 3/8% senior notes due 2026 at 99.801, according to a stabilization notice.

J.P. Morgan Securities plc, Barclays and Societe Generale are bookrunners for the Regulation S deal.

Total deal size is now €1.5 billion.

Meanwhile, the Republic of Belarus was believed to have priced dual tranches of notes, but that could not be confirmed by Prospect News’ deadline.

China’s Xinhu (BVI) 2018 Holding Co. Ltd. priced $200 million of 11% guaranteed senior notes due 2023, according to a notice.

Parent company Xinhu Zhongbao Co. Ltd. is the guarantor for the notes.

China Citic Bank International Ltd., CNCB (Hong Kong) Capital Ltd., ABCI Capital Ltd. and CCB International Capital Ltd. are the bookrunners.

The real estate company is based in Hangzhou, China.

And a number of Asian issuers priced in local currencies this past week.

Sovereigns in distress

But signs of sickness among weaker credits began to materialize also.

The Republic of Ecuador was seeking additional sources of funding after it warned it will rely on the grace period for coupon payments on three bonds due on Friday.

About $245 million in coupon payments for its 2022, 2025 and 2030 bonds may remain forthcoming as the country looks to access $2 billion of additional funding, Ecuador’s Richard Martinez, minister of the economy and finance, said on Monday.

At the same time, Martinez said the sovereign made a maturity payout of about $325 million on its 10½% notes that became due on Tuesday.

Speculation regarding potential defaults has spread to Turkey, Ecuador, Oman, Romania and South Africa after Lebanon joined Argentina in the default lineup earlier this month, according to EPFR Global’s weekly fund flows update. The data tracker said that both hard and local currency EM bond funds experienced redemptions in excess of $6 billion while, at the country level, Romania and Thailand bond funds posted new outflow records. “The latter, dedicated to one of the most tourist-dependent economies in Asia, saw an eye-popping $3.9 billion flow out,” EPFR’s Cameron Brandt said in the update.

In the Middle East, the UAE’s NMC Health plc appointed Matthew J. Wilde as the company’s chief restructuring officer effective March 22 and said the company’s debt level reckoning has ballooned to $6.6 billion as of March 23 from a previous $5 billion estimate made on March 10, according to an update filed with the London Stock Exchange.

The company also announced that chief financial officer Prasanth Shenoy has resigned following extended leave for ill health, and the company has appointed an interim director of finance from internal resources and PwC will continue to support its finance function.

More deals on tap

But gearing up for a better business tenor, there were a number of companies in Asia indicating that they plan to issue new bonds imminently. And many of those programs are in local currencies.

Xiamen International Port Co., Ltd. has proposed to issue up to RMB 16 billion of corporate bonds, super short-term notes and medium-term notes in China, according to a news release.

The up to RMB 6 billion of corporate bonds of up to 10-year duration will be in either one or multiple tranches of fixed-rate bonds and will be sold at par of RMB 100 to professional investors in the People’s Republic of China.

The proceeds will be used to satisfy working capital needs and to adjust the company’s debt structure.

The up to RMB 4 billion of short-term notes will be for not more than 270 days duration, and the proceeds will be principally for supplementing liquidity and repayment of interest-bearing debts as to satisfy working capital requirements and lowering financing costs.

The up to RMB 6 billion of medium-term notes will be for up to 10-years duration with proceeds earmarked for supplementing the group’s liquidity, repayment of interest-bearing debts and implementing its projects to satisfy the working capital requirements and lower the financing cost of the group.

All of the proposed issuance is subject to shareholder approval.

The Xiamen, China-based company is mainly engaged in the provision of port logistics services and commodity trading services, as well as the sale of construction materials.

Fubon Financial Holding Co. announced it plans to issue up to NT$40 billion of senior, unsecured corporate bonds in 2020, according to a regulatory notice on Friday.

The paper may be issued in one or more tranches.

Pricing will be subject to market conditions, and no further details were specified.

Fubon is a financial services company based in Taipei, Taiwan.

In addition, CLP Power Hong Kong Financing Ltd. said it is listing a $4.5 billion medium-term note program, according to a Hong Kong exchange listing notice.

The notes are guaranteed by CLP Power Hong Kong Ltd. and will be arranged by HSBC.

The company expects to issue notes in the next 12 months after the program becomes effective March 30.

The electric company is based in Hong Kong.

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