Primary market hosts Argentina; oil prices in focus; Egypt ‘on track’; Turkey sees orders

By Christine Van Dusen

Atlanta, Jan. 19 – Argentina sold new notes on a distracted Thursday, as investors eyed President-elect Donald Trump’s controversial cabinet appointments and awaited his upcoming inauguration.

Oil prices were in the spotlight, too, after the head of the International Energy Agency said he expects a significant rebound in U.S. oil production.

“Nonetheless, despite a high level of uncertainty and speculations in the market, the probability of further oil price growth is high,” according to a report from Schildershoven Finance BV.

Market-watchers were also looking at Egypt after the International Monetary Fund released its report on the sovereign’s Extended Fund Facility.

The IMF’s mission chief “appeared to be satisfied with the progress made by the government and central bank,” a London-based analyst said. “Egypt was on track to meet the required benchmarks and unlock the next loan tranche, potentially in late April.”

This comes as Egypt holds investor meetings ahead of a bond issue that could total $2.5 billion in five-, 10- and 30-year tranches.

Meanwhile, Turkey’s new issue of $2 billion 6% notes due March 25, 2027 that priced Wednesday at 98.858 to yield 6.15%, or Treasuries plus 375.7 basis points, drew an order book that was more than three-times oversubscribed, a market source said.

The notes were initially talked in the 6.2% area.

Barclays, Citigroup, Goldman Sachs and QNB Capital were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general financing purposes.

About 49% of the bonds were sold in the United States, 26% in the United Kingdom, 11% in Turkey and 11% in Europe.

Two tranches from Argentina

In its new deal, Argentina priced a $7 billion two-tranche issue of notes due 2022 and 2027, a market source said.

The $3.25 billion 5 5/8% notes due in five years priced at par to yield 5 5/8%, following talk in the high-5% area.

The $3.75 billion 6 7/8% notes due 2027 priced at 99.112 to yield 7%, following talk in the low-7% area.

Santander, BBVA, Citibank, Deutsche Bank, HSBC and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general purposes.

The final book was about $22 billion, according to an announcement from the sovereign.

GIB sells bonds

The primary market heated up, with Bahrain’s Gulf International Bank BSC selling $500 million 3½% notes due 2022 at 99.461 to yield 3.616%, or mid-swaps plus 170 bps, a market source said.

JPMorgan, GIB Capital, Citigroup, HSBC, Mizuho Securities, National Bank of Abu Dhabi and Standard Chartered Bank were the bookrunners for the Regulation S deal.

Kexim prices notes

On Wednesday, Export-Import Bank of Korea priced a three-tranche issue of $1.5 billion, according to a company filing.

The deal included $500 million floating-rate notes due 2022 that priced at par to yield Libor plus 87.5 bps. The $500 million 2 1/8% notes due 2020 priced at 99.905, and the $500 million 2¾% notes due 2022 priced at 99.736.

Daiwa Capital Markets, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan and Standard Chartered Bank were the joint bookrunners and joint lead managers for the Securities and Exchange Commission-registered deal. Hanwha Investment & Securities was the joint lead manager, and KEXIM Asia was the co-manager.

The proceeds will be used for general operations.

Colombia prints two tranches

Colombia priced $2.5 billion in new 10-year notes and a tap of its 5% notes due in 2045, according to a company filing.

The $1 billion 3 7/8% notes due 2027 priced at 98.596 to yield 4.042%, or Treasuries plus 160 bps.

The deal also included a $1.5 billion tap of the sovereign’s 5% notes due 2045, pricing at 97.828 to yield 5.146%, or Treasuries plus 210 bps.

Citigroup, Itau BBA and Morgan Stanley were the bookrunners for the Securities and Exchange Commission-registered deals.

The proceeds will be used for general governmental purposes.

Issuance from Philippines

Philippines priced $2 billion 3.7% notes due Feb. 2, 2042 at par to yield 3.7%, or Treasuries plus 66.7 bps, according to a filing from the sovereign.

The notes were talked in the 3.95% area.

Citigroup, Credit Suisse, Deutsche Bank, Standard Chartered and UBS were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used to finance the budget and repay debts.

Pampa Energia does deal

In another new deal this week, Argentina’s Pampa Energia SA priced $750 million 7½% notes due 2027 at a yield of 7 5/8%, a market source said.

Citigroup and Deutsche Bank were the joint bookrunners. Credit Agricole and Santander were co-managers for the deal.

Other details were not immediately available on Thursday.

Pampa Energia is an company based in Buenos Aires.

Primary sees CAF

Venezuela’s Corporacion Andina de Fomento (CAF) priced a €750 million issue of ½% notes due in 2022, according to a company announcement.

One-third of the orders came from central banks and official institutions of several countries, with the rest originated by asset managers, insurers, banks and pension funds.

Other details were not immediately available on Thursday.

CAF is a development bank based in Caracas.

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