Emerging Markets: Metinvest, Bulgaria, Mexico bring bond deals; China industrials tap market

By Rebecca Melvin

New York, Sept. 18 – China remained the most active region in the emerging markets primary market this past week, but other areas of the market showed signs of coming back to life following a slowdown during the summer months, according to Prospect News’ data.

From the Central and Eastern Europe region, Ukraine’s Metinvest BV, a holding company of mostly steel and mining assets, priced $333 million of 7.65% seven-year notes (/B/BB-).

The notes priced at 98.429 to yield 7.95%, or a spread of U.S. Treasuries plus 748.2 basis points.

Bulgaria priced two tranches of notes in euros, including a €1.25 billion tranche of 3/8% notes due 2030 priced to yield 0.389%, or mid-swaps plus 60 bps and a €1.25 billion tranche of 1 3/8% notes due 2050 priced to yield 1.476%, or mid-swaps plus 145 bps.

Pricing was tight compared to guidance of mid-swaps plus 75 bps area and initial price talk of mid-swaps plus 95 bps area for the 10-year notes and to guidance in the mid-swaps plus 160 bps area and initial talk of mid-swaps plus 175 bps to 180 bps for the 30-year notes.

The combined order book at the time guidance was released was more than €7.2 billion, skewed to the 10-year notes.

Also denominated in euros, Mexico priced €750 million of 1.35% notes due 2027 (Baa1/BBB/BBB-).

The notes priced at 98.337 on Monday for a yield to maturity of 1.603%, or a reoffer spread of 195 bps over mid-swaps, according to an FWP filing with the Securities and Exchange Commission.

The joint bookrunners are BNP Paribas, Credit Agricole CIB, Morgan Stanley & Co. International plc and Natixis Securities Americas LLC.

The notes are callable with a make-whole yield spread of Bunds plus 35 bps prior to June 18, 2027 and at par after that.

Another significant euro-denominated offering was by the Export-Import Bank of Korea, which priced euro- and dollar-denominated notes in three Securities and Exchange Commission-registered tranches on Monday, according to FWPs filed with the SEC on Wednesday.

Kexim priced €500 million of three-year notes at 100.355. The zero-coupon bonds are being issued as social bonds. The tranche was accompanied by a $400 million tranche of five-year fixed-rate notes at 99.961 with a ¾% coupon and a $500 million tranche of 10-year fixed-rate notes at 99.383 with a 1¼% coupon.

BofA Securities, Inc., Hongkong and Shanghai Banking Corp. Ltd., ING Bank NV, Singapore Branch, J.P. Morgan Securities LLC and Mizuho Securities USA LLC are joint bookrunners for the dollar-denominated notes.

HSBC, ING Bank, JPMorgan, Merrill Lynch International and Mizuho International plc are joint bookrunners for the euro-denominated tranche.

The lender is based in Seoul.

Two regional development banks also priced notes this past week. Corporacion Andina de Fomento sold $750 million of 1 5/8% notes due 2025 (Aa3/A+/A+) at 99.742 to yield 1.679%, according to an FWP filing with the SEC. The notes priced at a spread of 135 bps over mid-swaps.

Joint bookrunners for the offering are Citigroup Global Markets Ltd., Daiwa Capital Markets America Inc., Goldman Sachs International and Nomura International plc.

Proceeds for the bullet notes will be used to redeem debt that will mature in the fourth quarter of 2020. Until that time, proceeds will be invested in high-quality, short-term debt investments.

CAF is a Latin American development bank based in Caracas, Venezuela.

And Panama’s Banco Latinoamericano de Comercio Exterior (Bladex) priced $400 million 2 3/8% five-year notes (Baa2/BBB/), according to a news release.

Bank of America, SMBC Nikko Securities and Mizuho Securities are the bookrunners for the Rule 144A and Regulation S deal.

The Panama City-based supranational bank was established by the central banks of Latin American and Caribbean countries.

From there we return to the issues priced out of China in recent days. There was a triumvirate of very large deals. They included Contemporary Ruiding Development Ltd., Henan Water Conservancy Investment Group Co., Ltd. and Guangzhou Metro Investment Finance (HK) Ltd.

Contemporary Ruiding Development issued $1.5 billion of bonds in two tranches guaranteed by Contemporary Amperex Technology Co., Ltd., including $1 billion of 1 7/8% bonds due 2025 and $500 million of 2 5/8% bonds due 2030.

HSBC, BofA Securities, ICBC International and CMB International are the bookrunners and joint lead managers. Additional joint lead managers include Barclays, Bank of China, CCB International, China Citic Bank International, China Everbright Bank Hong Kong Branch, China Minsheng Banking Corp., Ltd., Hong Kong Branch, China PA Securities (Hong Kong) Co. Ltd., Citigroup Shanghai Pudong Development Bank Hong Kong Branch and Standard Chartered Bank.

The battery manufacturer and technology company Henan Water Conservancy Investment Group, a subsidiary of Guangzhou Metro Investment Finance (HK), priced $500 million of 2.8% bonds due 2025 (A3). The joint lead managers and bookrunners are Shanghai Pudong Development Bank Hong Kong Branch, CMB International, CNCB Capital, China Everbright Bank Hong Kong Branch and Standard Chartered Bank.

The joint global coordinators are China International Capital Corp., Guotai Junan International and Bank of China.

Listing is expected for Monday.

The company provides highway construction, water infrastructure construction, bridge construction and other related services. It is based in Zhengzhou, China.

Guangzhou Metro Investment Finance (HK) priced $500 million 1.507% notes due 2025 and $330 million 2.31% notes due 2030. The notes (//A+) are guaranteed by Guangzhou Metro Investment Finance (HK) and have a keepwell and liquidity support deed and a deed of equity interest purchase undertaking by Guangzhou Metro Group Co., Ltd.

GF Securities, Bank of Communications, Guotai Junan International, CMB International, Industrial Bank Co., Ltd. Hong Kong Branch and Standard Chartered Bank are joint global coordinators and also joint bookrunners and lead managers alongside China Everbright Bank Hong Kong Branch, China International Capital Corp., China Securities International, CMBC Capital, CMB Wing Lung Bank Ltd., DBS Bank Ltd., Haitong International, ICBC (Macau), OCBC Bank, Bank of East Asia, Ltd. and Yue Xiu Securities Co. Ltd.

The notes are being issued out of the group’s $3 billion medium-term note program.

Listing is expected for Friday.

The investment company is based in Guangzhou, China.

Finally, Hong Kong-based Concord New Energy Group Ltd., a wind power and solar power investment holding company priced $90 million 10¾% three-year notes (//BB-), which includes $83,448,000 of new exchange notes and $6,552,000 of additional new notes.

The new notes were sold at par, according to an announcement.

They will be consolidated to form a single series and will leave outstanding $117,627,000 of the old 7.9% notes due 2021.

The new notes are callable prior to maturity for a make-whole premium. Up to 35% are redeemable with cash from common stock sales for 110.75% of par plus interest.

Proceeds of the notes not used for the exchange offer, or $6,552,000, will be used for refinancing existing debt, for funding wind and solar power projects and for general corporate purposes including green projects under the company’s green bond framework.

UBS, Haitong International Oriental Patrol and China Everbright Bank Hong Kong Branch were managers of the new Regulation S notes and dealer managers of the exchange offer.

Singapore’s BOC Aviation Ltd. issued $750 million of 2 5/8% notes due 2030 (A-) on Thursday, according to a notice.

BNP Paribas, J.P. Morgan (SEA) Ltd., BOCI Asia Ltd., MUFG Securities Asia Ltd., Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd. and Hongkong and Shanghai Banking Corp. Ltd. are the bookrunners for the Regulation S and Rule 144A offering.

BOC Aviation is a global aircraft leasing company based in Singapore.

And Hyundai Capital America priced $2.5 billion of notes in three parts on Tuesday, according to a market source.

A $1.1 billion tranche of 1.25% three-year notes priced at a spread of 112 bps over Treasuries.

Guidance was at the 140 bps to 145 bps over Treasuries area.

A $750 million offering of 1.8% five-year notes priced at a Treasuries plus 157 bps spread, compared to talk in the 185 bps spread area.

Hyundai Capital sold $650 million of 2.375% seven-year notes at a Treasuries plus 192 bps spread.

Initial price talk was in the 220 bps spread area.

BofA Securities, Inc., BNP Paribas Securities Corp., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., Societe Generale and TD Securities (USA) LLC were the bookrunners.

Hyundai Capital America is an Irvine, Calif.-based auto financing arm of the Hyundai Motor Co.

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