Emerging Markets: Czech Gas to sell green notes; Angang Steel eyes up to RMB 14 billion bonds

By Rebecca Melvin

Concord, N.H., Aug. 27 – The primary market for emerging markets bonds was quieted this past week by the typical summer slowdown amid vacation schedules, but there were signs of life for the post summer market, and a couple of notable local currency deals were completed, according to market sources.

Czech Gas Networks Investments Sarl, the parent of Czech Grid Holding as, announced a mandate on Friday for a planned benchmark-sized offering of euro-denominated green notes with an eight-year maturity, according to a market source.

The notes, which are expected to be rated BBB+ by Fitch Ratings, were being marketed by ING, its green structurer, as well as Citigroup, Societe Generale and UniCredit as joint bookrunners.

The successful deal will represent the natural gas distributor’s debut in the green bond market. It is coming under Regulation S, subject to market conditions, following a series of fixed-income investor calls.

China’s Angang Steel Co. Ltd. said is proposing to issue up to RMB 14 billion of bonds in three types.

Specifically, the proposed issuance includes not more than RMB 4 billion of perpetual medium-term notes and not more than RMB 5 billion each of corporate bonds and renewable corporate bonds.

The issuance requires shareholder approval.

The perpetual medium-term notes will be issued in China’s domestic inter-bank bond market, targeting institutional investors, for a pricing period not to exceed seven years and comprised of single-type bonds or hybrid bonds. At the end of each pricing period, the company may exercise its redemption right or renew the pricing. The interest rate for the first period will remain constant and then reset after every pricing period.

The corporate bonds may be issued in one or more tranches at RMB 100 par. Target subscribers are professional investors. The effective term of the bonds will not exceed seven years but may comprise multiple terms. The interest rate will be fixed.

The renewable corporate bonds may be issued in one or more tranches at RMB 100 par.

The bonds and renewable bonds are expected to be listed on the Shenzhen Stock Exchange.

Proceeds will be used to repay debt, to replenish working capital and for project and equity investments or assets acquisition. Resolution regarding the issuance will be valid for 24 months.

Angang is a steel maker based in Anshan, China. Its parent company is Anshan Iron and Steel Group.

Among deals that priced this past week, from the renewable energy sector, Argentina’s Genneia SA successfully sold $65 million-equivalent green notes (Caa3) in two series.

The notes are short-dated, due in two and three years, according to a company release.

The $49 million-equivalent class XXXII notes are dollar-linked, have a 3˝% coupon and mature in 24 months.

The $16 million class XXXIV notes have a 6% coupon and mature in 36 months.

The offering was made in exchange for the company’s $500 million class XX notes and $53 million of private notes.

Orders for the new notes totaled more than $135 million, and Macro Securities, Balanz, BBVA, Banco Patagonia, Facimex, Max Capital, BST, BACS and Banco Hipotecario acted as underwriters of the notes, which are listed in NyMA’s social, green and sustainable bonds panel.

And Sao Paulo-based learning company Companhia Brasileira de Educacao e Sistemas de Ensino SA issued R$900 million of two-year non-convertible debentures in Brazil on Wednesday, according to a news release from parent company Arco Platform Ltd.

The debentures bear interest at the CDI rate plus 170 basis points.

They will be guaranteed by Aroc Educacao SA.

The maturity date is Aug. 25, 2023.

The issuer will use proceeds to meet its current obligations, including amounts payable in connection with recent acquisitions, corporate purposes and payment of its general indebtedness.

The Sao Paulo-based company uses data-driven learning methodology, proprietary adaptable curriculum, interactive hybrid content and high-quality pedagogical services to allow students to personalize their learning experience.

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