KEB Hana Bank prints bonds; Saudi Arabia preps megadeal; South Africa widens; roadshows ahead

By Christine Van Dusen

Atlanta, Oct. 11 – South Korea’s KEB Hana Bank printed new notes on Tuesday as Saudi Arabia advanced its long-awaited, three-tranche megadeal and crude oil prices received support from comments on the sidelines of the World Energy Congress in Istanbul.

“Remarks from Saudi Arabia’s Energy Minister Al-Falih and Russian President Putin suggested that both nations were ready to cooperate and implement an oil production freeze or cut,” a London-based analyst said.

With this as the backdrop, the timing for Saudi Arabia’s deal is “certainly interesting, as oil prices have edged up further amid expectations of a production cut, although details will only be finalized in late November,” he said.

The sovereign will set out on Wednesday for a roadshow to market the upcoming dollar-denominated issue of notes due in five, 10 and 30 years, a syndicate source said.

Citigroup, HSBC, JPMorgan, Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, MUFG Securities, Morgan Stanley and NCB Capital are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for general domestic budgetary purposes.

South Africa also received attention on Tuesday after Finance Minister Pravin Gordhan received a formal summons on charges of fraud, the analyst said.

“We saw headlines on an imminent arrest already in August, although it had become calm until today,” he said. “Unsurprisingly, the charges come as a shock for investors that have seen the Treasury as a solidly and independently run institution, not least because Gordhan was credited with South Africa’s rating affirmations by all three rating agencies earlier in the year.”

Removing Gordhan would be “very detrimental for investors’ confidence in South Africa,” he said.

In response to this news, the sovereign’s five-year credit default swaps spreads widened by about 15 basis points to 265 bps.

Pakistan loses some gains

In trading on Tuesday, the new notes from Pakistan – $1 billion of 5½% Islamic bonds due 2021 that priced at par – retraced some gains amid profit-taking, a trader said.

Citigroup, Deutsche Bank, Dubai Islamic Bank, Noor Bank and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

The notes moved on Tuesday to 101¼ bid, 101¾ offered.

KEB Hana prices notes

In its new deal, South Korea’s KEB Hana Bank priced $650 million of tranches due 2019 and 2021, a syndicate source said.

The $350 million 1¾% notes due in 2019 priced at 99.678 to yield Treasuries plus 85 bps, following talk of 90 bps.

The $300 million 2 1/8% notes due in 2021 priced at 99.492 to yield Treasuries plus 95 bps, following talk of 100 bps.

Citigroup, Credit Agricole CIB, JPMorgan, Standard Chartered Bank, UBS, KEB Hana Global Finance and Hana Financial Investment were the bookrunners for the Rule 144A and Regulation S deal.

The issuer is based in Seoul.

CFE gives guidance

Mexico’s Comision Federal de Electricidad (CFE) set talk in the Treasuries plus 337.5 bps area for a benchmark-sized issue of dollar-denominated notes due in February of 2027, a market source said.

BBVA and BofA Merrill Lynch are the bookrunners for the Rule 144A and Regulation S deal.

The proceeds will be used for working capital and for general corporate purposes.

CFE is a Mexico City-based electric company.

Roadshow for science park

China’s Jiangsu Zhongguancun Science Park Holding Group Co. Ltd. will depart on Thursday for a roadshow to market a dollar-denominated issue of notes, a market source said.

Haitong International Securities is the bookrunner for the Regulation S deal.

The roadshow will be held in Hong Kong.

The issuer is based in Beijing.

Ahli Bank sets roadshow

Qatar’s Ahli Bank QSC will set out on Wednesday for a roadshow to market a dollar-denominated issue of perpetual notes, a market source said.

The Islamic bonds will be non-callable for five years.

Citigroup, Credit Agricole CIB and Credit Suisse are the bookrunners for the Regulation S deal.

The lender is based in Doha.

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