Egypt launches $4 billion multi-tranche deal; Russia’s State Transport unit sets yield

By Paul A. Harris

Portland, Ore., Feb. 13 – Sovereigns traded somewhat lower during the New York session, according to a sellside source.

Interest rate volatility has taken a toll on the asset class, a London-based trader conceded.

However, if single-B rated Egypt can come with a benchmark three-part deal, “how bad can things be?” the source asked rhetorically.

In addition to Egypt, GTLK Europe Capital DAC, a special purpose vehicle of Russian state-owned PJSC State Transport Leasing Co., showed up with a dollar-denominated benchmark deal that is set to yield 5˝%.

Egypt launches $4 billion

The Arab Republic of Egypt launched a $4 billion multi-tranche Rule 144A and Regulation S senior notes offer (expected ratings S&P: B-/Fitch: B) on Tuesday.

The three-part offer saw all tranches launch tight to guidance.

Included are

• $1.25 billion of five-year notes launched at Treasuries plus 303 basis points, 2 bps inside of the 305 to 310 bps guidance;

• $1.25 billion of 10-year notes launched at 373 bps, 2 bps inside of the 375 to 380 bps guidance, and

• $1.5 billion 30-year notes launched at 478 bps, 2 bps inside of the 480 to 485 bps guidance.

Citigroup, First Abu Dhabi Bank, HSBC, JPMorgan and Morgan Stanley are the bookrunners. Morgan Stanley will bill and deliver.

Meanwhile, Kenya is on the road with a benchmark offering of 10- and 30-year bonds, the trader said.

Citigroup, JPMorgan, Standard Bank and Standard Chartered are leading the international roadshow for the dollar-denominated offering.

GTLK Europe sets yield at 5˝%

GTLK Europe set the yield on a benchmark offering of dollar-denominated seven-year Regulation S senior notes at 5˝%.

J.P. Morgan Securities plc, Renaissance Capital, Citigroup, Gazprombank, Sovcombank and VTB Capital are the stabilization managers, according to a pre-stabilization release issued on Tuesday.

The stabilization period was expected to begin on Tuesday.

Moody’s Investors Service assigned a provisional Ba3 rating to the notes. Fitch Ratings assigned the notes an expected BB rating.

GTLK Europe is a wholly owned direct subsidiary of GTLK Europe DAC and is ultimately owned by Russia’s State Transport Leasing (Ba2 positive).

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