New deals fly as Turkey sells $1 billion tap; Benin, Qatar Islamic Bank launch

By Rebecca Melvin

New York, March 19 – New issues flew off the shelves in emerging markets debt on Tuesday as the secondary market remained firm, according to market sources.

Republic of Turkey priced a $1 billion add on to its 7 5/8% notes due 2029 at 103.30 to yield 7.15%, marking its fourth foray into the EM debt market this year so far.

The deal, which printed tight to final guidance for a yield in the 7.2% area, had a yield spread of 454 basis points over U.S. Treasuries.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities plc were the joint bookrunners of the SEC-registered global bonds (Ba3//BB). The total deal size now stands at $3 billion.

With similar yield, Credit Bank of Moscow priced a $500 million deal of five-year notes at par to yield 7.121%, or a spread of 471.5 bps over U.S. Treasuries.

Pricing of the Rule 144A and Regulation S notes came tighter than the talked 7 1/8% to 7¼% yield, which was tightened from earlier guidance in the 7¼% area.

Citigroup, Societe Generale, Commerzbank, ING and Sova Capital were joint lead managers and bookrunners.

Proceeds will be used for general banking purposes.

From Latin America, AES Gener SA priced $550 million of 60-year junior subordinated notes at 99.948 to yield 7 1/8%, which was also right in line with the two mentioned deals.

The deal launched tight to guidance in the 7 3/8% area. Initial price talk was in the mid-to-high 7% area.

Joint bookrunners were Goldman Sachs & Co., Itau Unibanco Holdings, BofA Merrill Lynch, Scotia Bank and J.P. Morgan Securities LLC.

The Santiago-based electricity generator plans to use the proceeds to refinance its 8 3/8% hybrid notes due 2073 and for general corporate purposes.

For the Middle East and Africa, the Republic of Benin launched €500 million of amortizing notes (expected ratings: B+/B) to yield 6%. The repayment schedule for the bonds is for three equal payments due on March 26, 2024, 2025 and 2026.

Pricing was tightened from a yield in the area of 6 3/8%, and Citigroup, Natixis and Societe General were bookrunners of the Rule 144A and Regulation S notes.

And Doha-based Qatar Islamic Bank SAQ launched a $750 million sukuk to yield 150 bps over mid-swaps. Pricing was tightened from initial price talk at 170 bps to 175 bps over mid-swaps.

Barclays, Boubyan Bank, Credit Agricole, QInvest, QNB Capital and Standard Chartered Bank are joint bookrunners for the deal.

And Turkiye Sise ve Cam Fabrikalary AS, a glass manufacturer, launched a $150 million tap of its 6.95% seven-year notes to yield 7% on Tuesday. Pricing was tighter than talk for a yield of 7¼%. The original $550 million of Regulation S notes priced on March 7.

In Asia, Export-Import Bank of Korea (Kexim) sold €750 million 3/8% five-year bonds at 99.823 on Monday. J.P. Morgan Securities plc, Standard Chartered, Societe Generale CIB and UBS were joint bookrunners for the Regulation S notes.

Guangzhou, China-based developer KWG Group Holdings Ltd. priced $350 million of additional 7 7/8% senior notes due Sept. 1, 2023 at 102.125% of par.

The notes will be consolidated and form a single class with the $350 million original notes issued on March 1, bringing the total deal size to $700 million.

Proceeds will be used to refinance onshore and offshore debt.

Some subsidiaries of the company will guarantee the notes.

Also on Tuesday, Petroleo Brasileiro SA announced that it had received tenders for $1,440,420,000 principal amount, or 46%, of its $3,117,147,000 4 3/8% global notes due May 2023. The company expects to accept all of the notes tendered by the offer deadline and all of the notes delivered by the guaranteed delivery date.

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