Emerging markets: Equate, Bahrain, Mamoura bring large deals; Sappi Papier postpones notes

By Rebecca Melvin

New York, May 15 – Equate Petrochemical Co. KSCC priced $1.6 billion in dual tranches of bonds this past week, which was about half the yield fellow petrochemical company China Petrochemical Corp. reaped the week before.

Equate is an Ahmadi, Kuwait-based petrochemical company that is 85% owned by Petrochemical Industries Co. and Dow Chemical. Its $1 billion of five-year notes and $600 million of 10-year notes were sold by issuer MEGlobal Canada ULC. J.P. Morgan Securities plc, Citi, MUFG, NBK Capital, FAB, HSBC, Mizuho and SMBC Nikko were the bookrunners.

Bahrain priced $2 billion in debt, including a $1 billion note and a $1 billion sukuk, due in 10-years and 4.5-years, respectively. Both issues priced at par and have a stabilization period that ends June 7.

The Middle East also saw Abu Dhabi-based Mamoura Diversified Global Holding PJSC, formerly Mubadala Development Co. PJSC, launch a triple tranche of $4 billion of notes due in six, 10 and 30 years.

Mamoura’s $1 billion tranche of six-year notes was expected to yield mid-swaps plus 210 basis points, which was tight to initial price talk of mid-swaps plus 250 bps area and guidance in the mid-swaps plus 220 bps area.

The $1 billion tranche of 10-year notes was expected to price to yield mid-swaps plus 235 bps, which was tight to initial price talk in the mid-swaps plus 275 bps area and guidance in the mid-swaps plus 245 bps area.

The $2 billion tranche of 30-year notes was expected to price to yield 3.95%, which was tight to initial price talk in the 4 3/8% area and guidance in the 4.1% area.

The order books for the government-owned investment company’s tranches were in excess of $6.25 billion, $8.25 billion and $9 billion for the six-, 10- and 30-year tranches, respectively.

Banca IMI, BNP Paribas, BofA Securities, First Abu Dhabi Bank, HSBC, Natixis, and Societe Generale are joint lead managers, with BNP Paribas Taipei Branch, SG Securities (HK) Ltd., Taipei Branch each as manager and HSBC Bank (Taiwan) Ltd. as lead manager.

Israel taps market

Meanwhile, the State of Israel sold $5 billion of 3.8% series 21 notes due May 13, 2060 at par, with the notes priced under the sovereign’s €20 billion euro medium-term note program.

Goldman Sachs (Asia) LLC, Taipei Branch and Deutsche Bank AG, Taipei Branch managed the Regulation S deal, for which proceeds are to be used for general financing purposes.

Elsewhere, there were a couple of notable deals for the Central & Eastern Europe region, Lithuania’s state-controlled energy company UAB Ignitis Grupe waded in and brought a €300 million issue of 2% 10-year senior bonds.

The company, formerly Lietuvos energija, announced that it planned to price the deal on Monday, and price talk began at the mid-swaps plus 245 bps area yield. By the time final terms were set, the yield had been tightened to mid-swaps plus 230 bps.

The bonds were bought by 57 investors, mostly institutional investors from Germany, United Kingdom and Lithuania, including banks, investment and pension funds and insurance companies.

The issue has a make-whole call, three-month par call and change-of-control put, and the proceeds will be used for investments in green energy, for power distribution grid efficiency enhancements and for refinancing existing debt.

The state-controlled energy holding company is based in Vilnius, Lithuania.

CPI Property active

CEE-focused CPI Property Group priced €750 million of 2¾% senior bonds due May 12, 2026, according to a notice.

Credit Suisse, Deutsche Bank, HSBC, Nomura and UniCredit are managers for the Regulation S green bond offering, as previously reported. The Luxembourg-based real estate company is focused on property investments in central and Eastern Europe.

Also, CEE-focused PPF Telecom Group BV, formerly PPF Arena 1 BV, priced €500 million 3½% four-year notes at 99.634 to yield 3.6%, or a spread of mid-swaps plus 391.8 bps, according to a market source on Wednesday.

Books for the new PPF Telecom four-year note closed for the deal at more than €1 billion and at the tight end of guidance for a yield set at 3.6%

HSBC, Societe Generale CIB, BNP Paribas and UniCredit are global coordinators and joint bookrunners of the Regulation S notes.

There is a change-of-control put at 101%, and the bonds are callable prior to maturity with a make-whole payment of 50 bps over Bunds, and then callable at par.

The proceeds will be used to repay debt and for acquisitions.

Sappi Papier drops offering

The telecommunications infrastructure company operates O2 Czech Republic, CETIN and Telenor CEE.

But South Africa’s Sappi Papier Holding GmbH reconsidered its plans to issue a new deal. On Friday it announced that it decided not to proceed with the proposed offering of €250 million of five-year senior notes due to unsatisfactory market conditions.

“Sappi has a long history of prudent and proactive balance sheet management,” the Johannesburg-based coated paper manufacturer stated in the Friday release.

“Consistent with that and in light of the strong liquidity position it already has, the company is in a position to be flexible and proactive about its approach to bond markets.”

The company had planned to use the proceeds for general corporate purposes.

From Asia, PT Indonesia Asahan Aluminium (Persero) was a notable issuer, pricing $2.5 billion of notes in three tranches due 2025, 2030 and 2050, according three Singapore Stock Exchange notices on Friday.

The state-owned mining company priced a $1 billion tranche of five-year notes with a 4¾% coupon, a $1 billion tranche of 10-year notes with a 5.45% coupon and a $500 million tranche of 30-year notes with a 5.8% coupon.

Joint bookrunners of the Rule 144A and Regulation S notes were BNP Paribas, Mandiri Securities Ptd. Ltd., Citigroup Global Markets Singapore Inc., DBS Bank Ltd., Mizuho Securities Asia Ltd., HSBC, Malayan Banking Bhd., MUFG Securities Asia Ltd. and SMBC Nikko Capital Markets Ltd.

Earlier this month, the company announced that it was planning to price benchmark-sized dollar notes. At that time, it said it intended to retain at least $500 million of the proceeds from the sale to acquire shares in mining companies and to refinance its outstanding debt.

The company said it would use the remaining funds to pay the consideration and interest under concurrent tender offers for its 5.23% notes due 2021 and 5.71% notes due 2023.

The new notes’ bond market listing will be effective on Monday.

But aside from Indonesia Asahan Aluminium, which is an infrequent issuer in the international market, Asia was pretty quiet. China technology company Lenovo Group Ltd., based in Beijing, priced a $350 million add-on to its 5 7/8% notes due 2025, according to a company announcement.

The company sold the initial $650 million of 5 7/8% notes due 2025 at par on April 24.

Citigroup, BNP Paribas, Goldman Sachs (Asia) LLC and DBS Bank Ltd. were the joint lead managers of the new notes with Citigroup as stabilizing manager.

From Latin America, Grupo Energia Bogota SA ESP sold $400 million of 4 7/8% notes due 2030 that were more than 11 times oversubscribed with orders from 290 investors, according to a release. The company plans to use proceeds to finance its investment plan for the period 2020-2022.

The issuer is a Bogota, Colombia-based electricity provider in Central America, Southwest Brazil and the South Pacific.

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