EM debt markets quiet as broader markets trade off; Asia prices deals, adds to calendar

By Rebecca Melvin

New York, Jan. 22 – Emerging markets debt were mostly quiet and little changed on Tuesday, which was the start of a holiday-shortened week in the United States after financial markets were closed on Monday in observance of Martin Luther King Day.

There were no new issues announced in the Central & Eastern Europe, Middle East and Africa or Latin America regions.

“No, nothing so far. [It is a] very quiet week, which is surprising as conditions remain positive!” a London-based market source said.

The source was referring to strength in the emerging markets secondary market as bonds have moved tighter given expectations that the U.S. Federal Reserve is going to go slower and remain responsive to economic conditions as it moves ahead on its path to normalizing rates in 2019.

Despite the silence in CEEMEA and Latin America, there were a number of deals announced and priced in Asia, and Studio City Co. Ltd. and Studio City Finance Ltd. said they will market a $425 million offering of five-year senior notes (B+) during the latter part of the week, according to a market source.

A Rule 144A and Regulation S offering for the Macau-based gaming and entertainment company is expected to follow in the Jan. 28 week, with proceeds earmarked to help fund the tender offer for its 8½% senior notes due 2020.

Also for Asia, Korea Midland Power Co. Ltd. priced a $300 million issue of 3 3/8% three-year notes. The Seoul, South Korea-based power company sold the notes under Regulation S via lead managers and bookrunners Citigroup Global Markets Ltd., BNP Paribas and HSBC.

Alam Sutera Realty Tbk., a property developer based in Tangerang, Indonesia, issued $175 million of 11½% two-year senior via subsidiary Alam Synergy Pte. Ltd.

The new notes were sold via Citigroup Global Markets Singapore Pte. Ltd., UBS AG Singapore Branch and Nomura Singapore Ltd. as lead managers and bookrunners with proceeds going toward partial refinancing of its 6.95% senior notes due 2020 and for general corporate purposes.

And a new issuer, ZH International Holdings Ltd., priced $100 million 8% one-year senior bonds at par on Tuesday. The bonds will be guaranteed by Ever Diamond Global Co. Ltd., a company wholly owned by Huang Yanping. Yuanyin Securities Ltd. is the placing agent and investor of the bonds, which will not be listed and are freely callable. The investment holding company is based in Hong Kong and engages primarily in property development.

In addition, Central China Real Estate Ltd. priced $200 million of one-year senior notes at par to yield 7.325%.

Credit Suisse, Haitong International and Morgan Stanley are the joint bookrunners and joint lead managers for the Regulation S transaction.

The investment holding company is based in Zhengzhou City, China, and primarily engages in property development in China’s Henan Province.

Joining the forward calendar is China Evergrande Group, which plans to sell additional dollar-denominated senior notes to be consolidated with three series of notes that were priced originally in 2017.

The new notes for the real estate development company based in Guangzhou, China will be added to its $500 million of 7% senior notes due 2020 that the issuer priced March 23, 2017; the $598.2 million of 6¼% senior notes due 2021 that priced on June 28, 2017; and the $1 billion of 8¼% senior notes due 2022 that priced on March 23, 2017.

Credit Suisse, BofA Merrill Lynch, CEB International, China Citic Bank International and UBS will be joint global coordinators, joint lead managers and joint bookrunners of the additional notes.

In the broader markets on Tuesday, global stocks were on shaky footing, with indexes from Japan to Brazil down after the International Monetary Fund reduced its forecast for global economic growth in 2019. The downgrade on top of data on Monday showing that China’s economy grew at its slowest pace since 1990, sparked a broad selloff as investors worry that some important economies are weakening at a faster pace than previously expected.

© 2015 Prospect News.
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