Kuwait makes $8 billion debut; Evraz sells notes; investors await Fed meeting; Borets ahead

By Christine Van Dusen

Atlanta, March 13 – Oil-reliant Kuwait on Monday priced its first international bond – a doozy, at $8 billion – on an otherwise hesitant Monday as emerging markets investors awaited the two-day meeting of the Federal Reserve.

“Investors will focus on the Fed meeting this week,” according to a report from Schildershoven Finance BV. “The oil market dynamics may also affect the eurobonds’ prices.”

Also on Monday, Russia-focused Evraz Group SA printed new notes while market-watchers kept an eye on Brazil-based Companhia Energetica de Minas Gerais (Cemig).

Cemig is planning to sell majority stakes in power generation and transmission company Cemig GT and power distribution firm Cemig D.

“Cemig evaluates the potential proceeds for the deals at around R$4 billion,” according to a report from Schildershoven Finance BV. “If the company inks the deal with the desired price range, it potentially shrinks the debt load by 25%, improving the liquidity position along the way.”

In its debut deal, Kuwait priced an $8 billion issue of notes in tranches due 2022 and 2027, a syndicate source said.

The $3.5 billion 2¾% notes due 2022 priced at 99.366 to yield 2.887%.

The $4.5 billion 3½% notes due 2027 priced at 99.026 to yield 3.617%.

“Among the [Gulf region] sovereigns, Kuwait strikes as one of the strongest in terms of its fiscal and external balance sheet, thanks to low debt levels, very high buffers and low breakeven prices,” the London analyst said. “With oil receipts however accounting for circa 90% of government revenues, lower prices have resulted in a reported fiscal deficit of about 17% in 2016 and 2017 after mandatory transfers to the Future Generations Fund and excluding investment income, pointing to high financing needs.”

Kuwait seeks to ease pressure

JPMorgan, Citigroup, Deutsche Bank, HSBC, NBK Capital and Standard Chartered were the bookrunners for Kuwait’s Rule 144A and Regulation S deal.

“According to the latest comments, the sovereign indicated to raise $9.5 billion from international debt markets,” he said. “The issuance will ease pressure on drawdowns from the General Reserve Fund – part of the Kuwait Investment Authority sovereign wealth funds – and complement local debt issuances.”

Evraz prints bonds

In another Monday deal, Evraz Group priced $750 million 5 3/8% notes due March 20, 2023 at par to yield 5 3/8%, a syndicate source said.

Talk was set in the 5½% area.

The notes will be used to finance a tender offer.

JPMorgan, Citigroup, Deutsche Bank, Gazprombank and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

Evraz is a vertically integrated steel making and mining company based in London with operations mainly in Russia.

Borets to sell notes

The United Arab Emirates’ Borets Finance DAC is planning to issue new five-year notes to fund a tender offer, according to a company announcement.

Goldman Sachs, HSBC, Sberbank CIB and SIB (Cyprus) are leading the deal.

The notes are expected to settle on or near April 7.

Borets makes electrical submersible pumps for the oil and gas industry and has its global headquarters in Dubai.

Play seeks euro issuance

Polish telecom Play Topco SA plans to price a €500 million offering of 5½-year PIK toggle holdco notes on Tuesday, according to a market source.

JP Morgan is leading the deal.

The notes come with one year of call protection.

Fitch Ratings expects to assign its B- rating to the notes.

The Warsaw-based company plans to use the proceeds to fund a dividend.

Paul A. Harris contributed to this article.

© 2015 Prospect News.
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