Egypt brings new deal to primary market; oil, Trump, Turkey in focus; NTPC readies deal

By Christine Van Dusen

Atlanta, Jan. 24 – Egypt priced an awaited issue of $4 billion of notes on Tuesday as investors continued to eye oil prices and U.S. President Donald Trump’s executive orders.

“In line with expectations, U.S. President Trump yesterday signed an executive order to retract from the Trans-Pacific Partnership while also announcing a very major border tax,” a London-based analyst said. “In that light, protectionist policies indeed seem to be at the forefront of the new administration’s agenda.”

Meanwhile, oil prices ticked higher as Iraq said it was close to implementing output cuts.

“We therefore continue with a solid environment in EM credit, which has also lured the Egyptian sovereign to the primary markets,” he said.

Egypt’s three-tranche deal totaled $4 billion of five-, 10- and 30-year notes, which came to the market via BNP Paribas, JPMorgan and Natixis Securities in a Rule 144A and Regulation S deal.

The $1.75 6 1/8% notes due 2022 priced at par to yield 6 1/8%, following talk of 6 3/8% to 6 5/8%. The $1 billion 7½% notes due 2027 priced at par to yield 7½%, following talk of 7 5/8% to 7 7/8%. And the $1.25 billion 8½% notes due 2047 priced at par to yield 8½%, following talk of 8 5/8% to 8 7/8%.

BNP Paribas, JPMorgan and Natixis Securities were the bookrunners for the Rule 144A and Regulation S deal.

“I know people will gravitate to the 30-year, just for the bang for buck,” a London-based trader said. “That part of most sovereign curves tends to trade quite flat. It should also do well.”

The five-year tranche will likely appeal most to Middle Eastern accounts, the analyst said.

“The longer 10- and 30-year tranches are targeted to international investors,” he said.

Turkey eyed

Investors were also watching Turkey, where the central bank raised the late liquidity window lending rate to 11%.

That move “has failed to inspire the market,” a trader said. “Credit default swaps went 5 basis points wider on the headlines.”

Local banks are likely to feel the impact, another trader said.

NTPC on deck

India’s NTPC Ltd. could price its euro-denominated issue of benchmark-sized notes due in 10 years as soon as Wednesday, a market source said.

Axis Bank, Barclays, Citigroup, MUFG, SBI Capital Markets and Standard Chartered Bank are the bookrunners for the Regulation S deal.

NTPC is a New Delhi-based power company.

Shui On Land does deal

On Monday, China’s Shui On Land Ltd. priced $500 million 5.7% notes due Feb. 6, 2021 at 99.384, according to a company filing.

Standard Chartered Bank and Deutsche Bank were the joint bookrunners for the Regulation S offering.

Proceeds will be used to repay existing debt with near-term maturities and to fund capital expenditures.

Shui On Land is a Hong Kong-based property development company.

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