Benin, Mexico, Colombia, Dominican Republic price deals during week; Korean, Turkish banks active

By Rebecca Melvin

New York, Jan. 15 – Emerging markets debt saw a jump in new issuance this past week, which marked the middle of January and the second full week of 2021, as Treasury yields pulled back from a run-up starting Jan. 4.

The yield for the 10-year Treasury bond was 1.097% as of Friday afternoon, down about 3 basis points on the day and down about 15 bps from Tuesday morning.

There was a reported $13.77 billion of emerging markets debt issuance in 26 hard-currency deals this past week, compared to $3.86 billion of issuance in 16 deals for the Dec. 14-18 week, which was the last full week before the year-end holidays, according to Prospect News’ data.

Benin, Mexico, Colombia and the Dominican Republic were the week’s sovereign issuers, and banks from India, Turkey, Abu Dhabi as well as two Korean development banks, Export-Import Bank of Korea and Korea Development Bank, joined the list of corporate issuers.

Benin’s new issue

West Africa’s Republic of Benin priced €1 billion of amortizing notes in two tranches, including €700 million of 4 7/8% notes due Jan. 19, 2032, which have a 10-year weighted average life, and €300 million of 6 7/8% notes due Jan. 19, 2052, which have a 30-year weighted average life.

The 10-year notes priced at 98.084 to yield mid-swaps plus 531 bps. Pricing was low to guidance for a yield in the 5 3/8% area, following initial price talk for a yield in the high- to mid-5% area. Orders for the 2032 notes were more than €1.7 billion at the time guidance was released.

The 30-year notes priced at 95.462 for a spread over mid-swaps of 717 bps.

Citigroup Global Markets Ltd. and Societe Generale were bookrunners of the Rule 144A and Regulation S deal.

Mexico taps market

Mexico sold a €2,698,944,000 of notes in two parts on Thursday, including €1,514,779,000 of 1.45% global notes due 2033, which priced at 97.427 for a spread over mid-swaps of 180 bps, and €1,184,165,000 of 2 1/8% global notes due 2051, which priced at 92.756 to yield mid-swaps plus 265.2 bps.

Proceeds of €514.8 million of the 2033 notes and €384.2 million of the 2051 notes will be used to fund the purchase of preferred tenders.

Banco Santander, SA, Barclays Bank plc, BNP Paribas and Citigroup acted as joint lead underwriters for the registered offering.

Colombia prices

Colombia priced $2,839,952,000 of new global notes due 2061 and a $1,539,952,000 add-on to its 3 1/8% global notes due 2031.

The add-on of 3 1/8% notes priced at 102.812 for a reoffered yield of 2.8%, or a spread over U.S. Treasuries of 166.4 bps. The new 3 7/8% global bonds due 2061 priced at 97.707 for a yield of 3.99%, or a spread over U.S. Treasuries of 210 bps.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are joint bookrunning managers for the SEC-registered notes.

Dominican Republic active

The Dominican Republic sold notes in two parts, including $1.5 billion of new notes due 2041 with a 5.3% coupon and $1 billion of notes in a reopening of its 3.87% notes due 2030.

The offering was more than four times oversubscribed.

Citibank and JPMorgan led the transaction.

Development banks

Two Korean development banks were among the lenders that priced bonds this past week.

Export-Import Bank of Korea (Kexim) priced $1 billion of 2¼% notes due Jan. 13, 2031. Barclays, Citigroup, HSBC Ltd., JPMorgan, MUFG and Standard Chartered Bank acted as lead managers and bookrunners for the notes, which were listed on the Singapore Exchange on Thursday.

Korea Development Bank sold a combined $1.5 billion of notes in three tranches, including $700 million of 0.4% notes due June 19, 2024 at 99.756, $500 million of 0.8% notes due July 19, 2026 at 99.759; and $300 million of 1 5/8% notes due Jan. 19, 2031 at 99.715.

BNP Paribas, BofA Securities, Inc., JPMorgan, KDB Asia Ltd., Societe Generale, Standard Chartered Bank and UBS AG Hong Kong Branch were the joint bookrunners.

Continued supply

Turkey’s Yapi ve Kredi Bankasi AS (Yapi Kredi) priced $500 million of 7 7/8% fixed-rate resettable Tier 2 notes due Jan. 22, 2031 (expected ratings: Caa2//B-) at par on Thursday.

The notes are non-callable until Jan. 22, 2026. After the call date until maturity, the rate will be fixed at the Constant Maturity Treasury rate plus a reset margin of 741.5 bps.

Pricing was tightened from guidance in the area of 8 1/8% and initial talk in the 8½% area. Order books at the time the deal was launched were more than $3.2 billion.

The joint lead managers and bookrunners for the Rule 144A and Regulation S deal are BNP Paribas, BofA Securities, HSBC, MUFG, JPMorgan and UniCredit Bank.

The proceeds will be used for general corporate purposes, which may include redemption of the issuer’s outstanding $500 million fixed rate resettable Tier 2 notes due 2026.

Yapi Kredi is an Istanbul-based lender.

First Abu Dhabi Bank PJSC issued $500 million of five-year trust certificates (expected: Aa3//AA-) at par with a distribution rate of 1.411% through FAB Sukuk Co. Ltd., according to a term sheet.

Dubai Islamic Bank PJSC, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, Islamic Corp. for the Development of the Private Sector, KFH Capital Investment Co. KSCC, NCB Capital Co. and Standard Chartered Bank are the managers.

The series 4 certificates will be issued under the bank’s $3.5 billion trust certificate issuance program.

The securities are non-callable.

First Abu Dhabi Bank is a lender operating in the United Arab Emirates.

Other lenders

Russia’s Credit Bank of Moscow priced €750 million of five-year notes (BB-/BB) at par with a 3.1% coupon, with Societe Generale CIB managing the deal.

Credito Real, SAB de CV priced $500 million of 8% notes due 2028 (BB/BB+), which are redeemable either in part or in whole starting on Jan. 21, 2025.

The Rule 144A and Regulation S notes will be used to partially refinance the company’s 2023 notes with a 7¼% coupon, to pay expenses relating to the placement of the new notes and for general corporate purposes.

The notes were oversubscribed by 2.1 times.

Credito Real provides consumer financing. It is based in Mexico City.

State Bank of India issued $600 million of 1.8% notes due 2026 (expected ratings: BBB-/BBB-) through its London branch on Wednesday, according to a notice.

Merrill Lynch (Singapore) Pte Ltd., Citigroup Global Markets Ltd., HSBC, JPMorgan, MUFG Securities Asia Ltd., SBICAP (Singapore) Ltd., and Standard Chartered Bank were lead managers and bookrunners of the Regulation S deal.

The bank is based in Mumbai.

Meanwhile, India’s Shriram Transport Finance Co. Ltd., a Mumbai-based provider of commercial vehicle financing, issued $500 million of 4.4% senior secured notes due 2024.

Other corporates

Singapore Airlines Ltd. priced $500 million of 3% notes, series 9, due July 20, 2026 under its S$10 billion multicurrency medium-term notes program, according to a company announcement.

The notes were priced of 99.573.

The proceeds from the issue of the notes under the program will be used for aircraft purchases and aircraft related payments and general corporate or working capital purposes, including refinancing of existing borrowings of the company.

Citigroup Global Markets Singapore Pte. Ltd. is the sole global coordinator and Citigroup, the Hongkong and Shanghai Banking Corp. Ltd., Singapore Branch and Merrill Lynch Pte. Ltd. are the joint lead managers.

Singapore Airlines is the flag carrier of Singapore.

Hong Kong-based property developer Yuexiu Property Co. Ltd. said its indirectly wholly owned subsidiary, Westwood Group Holdings Ltd., priced $750 million of notes on Tuesday.

The notes (Baa3//BBB-) will be guaranteed by Yuexiu Property and will be issued under the company’s recently launched $3 billion guaranteed medium-term note program.

The issue consists of $600 million of 2.8% notes due 2026 and $150 million of 3.8% notes due 2031. The series 3 notes due 2026 will be issued at 99.884, and the series 4 notes due 2031 will be issued at 99.819.

Proceeds will be used to repay existing medium- to long-term offshore debt that becomes due within one year.

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