Qatar Re sells bond; sentiment ‘remarkably strong’; Akbank, Evraz, Paraguay, Lenovo prep deals

By Christine Van Dusen

Atlanta, March 6 – Qatar Re printed the first hybrid bond from the Middle East on a strong Monday that saw Turkey’s Akbank TAS and Russia-focused Evraz Group SA embark on roadshows while Paraguay and China’s Lenovo Group Ltd. advanced new deals.

“Sentiment remains remarkably solid for EM credit despite markets now having fully priced in a hike by the Fed next week,” a London-based analyst said. “Following comments by her colleagues already earlier in the week, Fed Chair Yellen followed through and said that a rate hike was appropriate if employment and inflation evolve in line with the Fed’s expectations.”

Looking to Ukraine, the sovereign reached a staff-level agreement with the International Monetary Fund on its third review, the analyst said.

“Subject to approval by the Executive Board, this would pave the way for another $1 billion in funds, bringing the total disbursements to $8.3 billion out of the $17.5 billion agreed at the time of approval in March 2015.”

Croatia-based Agrokor received some attention on Monday after S&P downgraded the company’s rating to B- from B.

“The rating downgrade triggered a new correction in the company’s bonds,” according to a report from Schildershoven Finance BV. “At the same time, the group remains highly leveraged ... currently, access to capital markets appears to be very uncertain.”

Agrokor recently saw its bonds fall as a result of the company’s conflict with Serbian electricity providers. Local media in Serbia reported that electricity had been turned off 10 of the retail company’s stores in the country. Agrokor denied the claim.

“Meanwhile, Agrokor [is] said to be in talks with [Russia’s] Sberbank for €300 million financing,” Schildershoven said.

Market sources were also whispering about Abu Dhabi Islamic Bank and a possible issue of dollar-denominated Islamic bonds.

Qatar Re sells bonds

In its new deal, Qatar Re – the reinsurance unit of Qatar Insurance Co. – priced $450 million tier II perpetual notes at a yield of 4.95%, a market source said.

The notes were initially talked in the 5½% area.

The notes come with 5½ years of call protection.

BNP Paribas, Emirates NBD Capital, HSBC and National Bank of Abu Dhabi were the bookrunners for the deal.

Other details were not immediately available on Monday.

The issuer is based in Hamilton, Bermuda.

Roadshow for Akbank

Turkey’s Akbank is on a roadshow this week for a dollar-denominated issue of 10-year notes, a market source said.

BofA Merrill Lynch, Citigroup, Goldman Sachs, HSBC, Societe Generale CIB and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The notes will be non-callable for five years.

Akbank is a lender based in Adana, Turkey.

Evraz on marketing trip

Emerging markets-focused Evraz Group is on a roadshow for a dollar-denominated issue of notes that will be used to finance a tender offer, a market source said.

The tender offer is for any and all of two series of notes and up to $300 million of one other series, according to a company announcement.

The roadshow is expected to end on Friday.

Citigroup, Deutsche Bank, Gazprombank, JPMorgan and VTB Capital are the bookrunners for the deal.

Evraz is a vertically integrated steel making and mining company based in London with operations mainly in Russia.

Paraguay picks bookrunners

Paraguay has mandated BofA Merrill Lynch and Citigroup as bookrunners for an issue of up to $550 million of notes, a market source said.

The proceeds will be used to refinance debt and for infrastructure projects.

The deal is expected to come to the market this month.

Lenovo plans issuance

China’s Lenovo Group is looking to issue dollar-denominated perpetual intra-group subordinated notes via subsidiary Lenovo Perpetual Securities Ltd., according to a company filing.

ANZ, BOC, Barclays Bank, BNP Paribas, CCB Asia, Citigroup, Credit Agricole CIB, DBS Bank, BofA Merrill Lynch, Mizuho Securities, Morgan Stanley, MUFG Securities, Societe Generale and Standard Chartered Bank are the bookrunners for the Regulation S deal. BNP Paribas, Citigroup, DBS Bank, and Morgan Stanley are the joint global coordinators.

The proceeds will be used to repay amounts outstanding under a promissory note to Google Inc., in relation to the acquisition of Motorola Mobility Holdings LLLC, and for working capital and general corporate purposes.

The issuer also plans to print dollar-denominated drawdown notes.

Lenovo is a Beijing-based technology company.

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