Polyus Gold prints notes; Fondo Mivivienda, Equate, ADB advance deals; Middle East eyed

By Christine Van Dusen

Atlanta, Feb. 1 – Polyus Gold International Ltd. sold notes on Wednesday and several issuers advanced deals amid relatively stable oil prices and a continued focus on President Donald Trump’s cabinet appointments, announcements and executive orders.

“The relative stability of oil in this 50.50 to 53 range, combined with plenty of maturing debt, only a handful of new issues and still solid local demand for paper, has meant one thing – spread tightening,” a trader said. “And of course on days when rates sell off, we just tighten. Dealers lose paper and probably don’t run as much risk as they have in years gone by, and hence are happy replacing shorts even if spreads look unappealing.”

Against this backdrop, Peru’s Fondo Mivivienda SA continued a roadshow, Kuwait’s Equate Petrochemical Co. KSCC planned a marketing trip and Philippines’ Asian Development Bank (ADB) sought euro-denominated issuance.

In trading on Wednesday, Middle Eastern issuers entered February with outperformance under their belts. Lebanon’s paper in January was a standout, as were many perpetual issues and long-end bonds, he said.

“Lebanon’s was a superb move tighter with a steepening bias,” he said. “They have a decent maturity in the middle of March. Certainly their curve is ripe for some issuance to help some of the sticky bonds maybe come out, trade, show relative value. Spreads on some 2018 to 2020 bonds are the best part of 75 bps to 95 bps tighter over the month.”

Oman was an underperformer, he said, as were Jordan, Sharjah and some bonds due in 2020.

“On balance, a solid start to the year,” he said. “The market is navigating the broader backdrop of uncertainty and headline risk given the game changing events of late in Washington.”

Oil in focus

And, of course, the Gulf region remains “hostage to oil,” the analyst said. “Certainly we are now in a more comfortable range and zone for the vast percentage of [Middle Eastern] sovereigns. But exceptions remain the obvious ones of Oman and Bahrain.”

Several issuers from the Middle East released earnings reports on Wednesday, including lenders based in Abu Dhabi.

“We consider bank credit as very tight,” a London-based analyst said.

Abu Dhabi sovereign paper has tightened over the past week, with the 2021s trading at z-spread plus 34 bps and the 2026 notes trading at z-spread plus 86 bps, a trader said.

“Super well-bid,” he said.

Polyus prices

In its new deal, EM-focused Polyus Gold priced $800 million 5¼% notes due Feb. 7, 2023 at par to yield 5¼%, according to a company announcement.

JPMorgan, Alfa Bank, Gazprombank, Renaissance Capital, Sberbank and VTB Capital were the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for debt refinancing and other general corporate purposes.

London-based Polyus is a gold producer with mines in Russia and Kazakhstan.

Mivivienda on roadshow

Peru’s Fondo Mivivienda is on a roadshow for a possible issue of dollar-denominated notes, a market source said.

The roadshow is taking place in London, Lima, Boston, Los Angeles and New York and will end on Friday.

Morgan Stanley and Scotiabank are the bookrunners for the deal.

Mivivienda is a for-profit mortgage financing institution owned by the Republic of Peru and based in Lima.

Roadshow for Equate

Kuwait’s Equate Petrochemical will set out on Sunday for a roadshow to market a dollar-denominated issue of Islamic bonds due in seven years, a market source said.

Citigroup, HSBC, JPMorgan, KFH Capital and NBK Capital are the global coordinators and joint bookrunners for the Regulation S deal. Mizuho Securities, MUFG, National Bank of Abu Dhabi and SMC Nikko are also joint bookrunners.

The roadshow will start in Abu Dhabi and Dubai, then travel to London, Hong Kong and Singapore before concluding on Feb. 12 in Kuwait City..

Equate is 85% owned by Petrochemical Industries Co. and Dow Chemical and produces essential chemical compounds as the largest petrochemical complex in Kuwait.

ADB to issue

Philippines’ ADB is planning to issue euro-denominated notes via three bookrunners, according to a company announcement.

JPMorgan, Citigroup and Deutsche Bank are the bookrunners for the Regulation S deal.

ADB, based in Manila, focuses on reducing poverty in Asia and the Pacific through economic growth, environmentally sustainable growth and regional integration.

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