Colombia, Colbun price for LatAm region; Korea lenders wade in; Metalloinvest prices

By Rebecca Melvin

Concord, N.H., Oct. 15 – Some emerging markets issuers enjoyed a window of opportunity this past holiday-shortened week as recent market worries retreated a bit and financial markets including U.S. stocks made weekly gains.

U.S. markets were closed on Monday in observance of the Columbus Day holiday.

Among favorable news headlines late in the week were the first U.S. banks’ reporting quarterly earnings and word from a China central bank official commenting that the debt problems of China Evergrande Group are containable.

In emerging markets debt, the Republic of Colombia priced a $1 billion tap of its 5.2% global bonds due 2049 for the Latin America region. The tap issue will form a single series and be fully fungible with the $1.8 billion of existing 5.2% bonds due 2049 issued on Jan. 28, 2019 and Jan. 30, 2020. The new notes priced at 101.088 to yield 5.125%, or a spread over U.S. Treasuries of 311.6 basis points.

BBVA Securities Inc., BNP Paribas Securities Corp. and Goldman Sachs & Co. LLC were the joint bookrunners.

Chilean power company Colbun SA priced $600 million of 3.15% green notes due Jan. 19, 2032 on Thursday to yield Treasuries plus 165 bps, according to a market source.

Pricing came tight to initial talk in the area of Treasuries plus 200 bps.

Citigroup, JPMorgan, Santander and Scotia were joint bookrunners of the notes.

Meanwhile, two news outlets reported that Mexico’s Braskem Idesa SAPI priced $1.2 billion of 10-year sustainability-linked bonds. The larger-than-expected deal size was attributed to strong demand, and the paper priced with a 6.99% coupon at 99.94 to yield 7%. Prospect News could not immediately confirm the deal.

In another bright spot, Mexico’s Cemex, SAB de CV amended its credit agreement dated July 19, 2017, modifying financial covenants relating to the release of liens on collateral securing its senior debt.

The release of security guaranteeing the debt “is the result of the company’s deleveraging process and marks a decisive step in its path towards an investment-grade credit rating,” the company said.

For the Central and Eastern European region, Moscow mining and metallurgy company Metalloinvest sold $650 million of 3 3/8% seven-year notes at a Treasuries plus 199.5 bps spread, according to a market source.

Initial price talk on the coupon was in the 3 5/8% area.

J.P. Morgan, SberCIB and Societe Generale are global coordinators and bookrunners of the Rule 144A and Regulation S deal, and Deutsche Bank, Gazprombank, IMI-Intesa Sanpaolo, UBS Investment Bank, UniCredit and VTB Capital are joint lead managers and bookrunners.

In conjunction with the offering of new notes, Metalloinvest announced an invitation for holders to tender for cash any and all of the company’s 4.85% notes due 2024 and a consent bid that provides for mandatory early redemption of the notes. The early participation deadline was Oct. 12, and the offer expires on Oct. 27.

Looking ahead, Russian leasing company GTLK Europe DAC said it plans to price a benchmark-sized offering of dollar-denominated seven-year notes, guaranteed by JSC GTLK next week.

Citi, Eurasian Development Bank, Gazprombank, JPMorgan, Renaissance Capital, Societe Generale and VTB Capital are mandated as joint lead managers and bookrunners to arrange a global investor call on Friday as well as a series of fixed-income investor calls regarding the Regulation S-only offering.

Lenders from Korea price

The Export-Import Bank of Korea (Kexim) priced a pair of deals this past week. It priced €850 million 0% three-year green notes at 100.427 to yield minus 0.142%, or a spread over mid-swaps of 15 bps and $1 billion of 1¾% green notes with a seven-year tenor on Tuesday.

Kexim said the proceeds of the sale of euro notes will be used to finance or refinance new or existing projects or assets related to renewable energy, clean transportation, energy efficiency, sustainable water and wastewater management and pollution prevention and control under the lender’s sustainable finance framework.

J.P. Morgan Securities plc, BNP Paribas, Credit Agricole CIB, HSBC, ING and Shinhan Investment are joint bookrunners and lead managers of the Regulation S deal. ING was the green structuring adviser.

The notes will be listed on the Singapore Stock Exchange and the Frankfurt Stock Exchange.

A new eight-year U.S. dollar denominated green bond may follow at Asia’s market open on Wednesday, subject to market conditions.

The dollar notes priced with a spread of Treasuries plus 35 bps. Talk had been for a spread in the Treasuries plus 60 bps area.

BNP Paribas, Credit Agricole CIB, HSBC, ING, J.P. Morgan Securities plc and Shinhan Investment were bookrunners of the deal.

The lender is based in Seoul.

Also pricing from South Korea was KB Kookmin Bank, which priced €500 million 0.048% five-year green covered bonds at par for a yield of mid-swaps plus 14 bps, according to a syndicate source on Wednesday.

Pricing came below initial price thoughts for yield of mid-swaps plus 18 bps area. Later, the deal was guided to the mid-swaps plus 15 bps area when order books were in excess of €1.2 billion.

BNP Paribas, Citigroup, Credit Suisse, ING, JPMorgan and KB Securities were joint lead managers of the Regulation S deal.

The covered bond is backed by Korean residential mortgages.

Kookmin Bank is a lender based in Seoul.

And KEB Hana Bank sold $300 million of 3½% sustainability notes, which are non-callable for five years.

The notes priced with a spread of 240.9 bps over Treasuries.

Talk was for a yield in the 3½% area.

The notes are non-callable for five years.

BNP Paribas, Citi, Credit Suisse CIB, HSBC and Mizuho are the bookrunners of the deal.

Proceeds, according to S&P Global Ratings, will be mainly used to finance eligible green and social projects in accordance with its sustainable financing framework.

China sees cross currents

China Everbright Bank Co., Ltd., Hong Kong Branch is listing a $5 billion medium-term note program, according to a listing notice with an appended offering circular on Wednesday.

The arrangers and dealers for the program are CEB International, China Everbright Bank Hong Kong Branch and Citigroup.

The Regulation S program is expected to take effect Oct. 13 and does not supersede the previously reported $5 billion Regulation S program established by China Everbright Bank Co. Ltd. on Aug. 13.

Proceeds derived from program drawdowns will be used for general funding purposes.

China Everbright is a Hong Kong-based financial conglomerate in China.

But China Properties Group Ltd. defaulted on $225.6 million 15% senior notes due 2021, which matured on Oct. 15, according to a company announcement.

The company said it informed holders and plans to continue to engage in dialogue with the holders to keep them informed of actions taken by the company to arrange settlement for the outstanding amount.

The default is due to a liquidity issue, the company said, and it plans to fund the maturity when it has completed the sale or refinancing of certain of its assets, which may include refinancing or disposal of certain real estate in Shanghai and Chongqing, China.

Trading in shares of China Property on the Hong Kong exchange has been suspended since April 1 and will remain suspended until further notice, the company noted.

The real estate developer is based in Hong Kong.

And China Green (Holdings) Ltd. will not issue a proposed $30 million three-year bonds with a 5½% coupon that were announced earlier in the year. Placement of the bonds was going to be made on a best-efforts basis by Forest Resources Management Ltd. The underwriter initially had until Oct. 9 to procure subscribers for the bonds. China Green is a Hong Kong-based investment holding company that grows, processes and sells agricultural products and makes consumer food products.

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