Emerging Markets: Indonesia, Slovenia, Mexico wade into 2021; Hyundai prices; Klabin on tap

By Rebecca Melvin

New York, Jan. 8 – China corporates accounted for a sizeable chunk of new issuance in emerging markets debt this past week, but there was also activity among sovereigns and other regions of the market including Indonesia’s four tranches of euro and dollar notes as well as deals priced by issuers in the Middle East, CEE and Latin America.

Slovenia was another sovereign issuer, pricing €2 billion in a dual-tranche offering of notes on Tuesday, including €1.75 billion of new 10-year notes and a €250 million tap of its 0.4875% notes due Oct. 20, 2050.

And Mexico was another sovereign issuer, and like Indonesia it priced $3 billion of dollar notes but was missing the €1 billion euro-denominated tranche that Indonesia included.

Argentina’s MercadoLibre Inc. priced $1.1 billion in two tranches. Hyundai Capital America priced $2.7 billion in three tranches on Tuesday. And a pair of banks priced deals, including one from Dubai and the other from Turkey.

There are also deals in the offing. Klabin SA announced it plans to issue a 10-year note in the international markets via its Klabin Austria GmbH subsidiary. Klabin was last in the market in March 2019 with $1 billion of notes due 2029 and 2040. The proposed Klabin notes received BB+ ratings from both S&P and Fitch, and the proceeds will be used to repay Klabin Finance SA’s 2024 notes and for general corporate purposes, according to S&P.

In addition, the new notes have an interest rate bump up of 25 basis points from January 2026 if Klabin, a Sao Paulo-based pulp, paper and paper products company, does not satisfy its sustainability water consumption performance targets.

China’s Country Garden Holdings Co. Ltd. and Yuzhou Group Holdings Co. Ltd. priced, and Gemdale Ever Prosperity Investment Ltd. and China Cinda (2020) I Management Ltd. announced new bond issuance programs.

In all there was about $14.94 billion in 23 deals that priced since Jan. 5, according to Prospect News’ data.

Sovereigns tap market

Indonesia priced four tranches of euro- and dollar-denominated notes (Baa2/BBB/BBB) on Tuesday. The notes included €1 billion of 1.1% bonds due March 12, 2033, $1.25 billion of 1.85% bonds due March 12, 2031, $1.25 billion of 3.05% bonds due March 12, 2051 and $500 million of 3.35% bonds due March 21, 2071.

The Indonesia 1.1% bonds priced at 99.165 to yield 1.174%, or 135 bps over mid-swaps. The 1.85% notes priced at 99.538 to yield 1.9%, or 95.3 bps over Treasuries. The 3.05% bonds priced at 99.02 to yield 3.1%, or 139.9 bps over Treasuries. And the 3.35% bonds priced at 98.794 to yield 3.4%, or 169.9 bps over Treasuries.

The bookrunners on the deal were Citigroup Global Markets Inc., DBS Bank Ltd., Deutsche Bank AG, Singapore Branch, Mandiri Securities Pte. Ltd. and Standard Chartered Bank.

Approval in principal has been obtained to list the bonds on the Singapore Exchange Securities Trading Ltd. and the open market of the Frankfurt Stock Exchange. Indonesia intends to use the proceeds for general purposes and to fund recovery from the Covid-19 pandemic.

Slovenia’s dual-tranche included €1.75 billion of new 10-year notes and a €250 million tap of its 0.4875% notes due Oct. 20, 2050, according to a syndicate source.

The 0% notes due 2031 priced at 100.973 to yield minus 0.096%, or a yield spread of mid-swaps plus 17 bps. The notes were talked at mid-swaps plus 20 bps area.

The €250 million tap of 2050 notes priced at 102.992 to yield 0.381%, or a yield spread of mid-swaps plus 40 bps. The deal was talked earlier to yield in the mid-swaps plus 45 bps area.

The order books for the two issues stood at €12.6 billion at the time of launch, with orders of €10.6 billion for the 2031 notes.

Barclays, BNP Paribas, Credit Agricole CIB, Deutsche Bank, HSBC and Nova KBM are bookrunners for the Regulation S transactions.

Mexico priced $3 billion of 3¾% global notes due 2071 (Baa1/BBB/BBB-) at par to yield a spread of 209.3 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

Deutsche Bank AG, Taipei Branch, Goldman Sachs (Asia) LLC, Taipei Branch, HSBC Bank (Taiwan) Ltd. and Morgan Stanley Taiwan Ltd. are the joint bookrunners for the SEC-registered deal.

The proceeds will be used for general purposes of the government, including the refinancing, repurchase or retirement of its domestic and external debt.

Sprinkled deals

MercadoLibre, the Buenos Aires-based e-commerce and payment company, priced $1.1 billion of notes on Thursday, or $400 million of 2 3/8% five-year sustainability notes and $700 million of 3 1/8% 10-year notes (Ba1/BB+/BB+), both at par.

BNP Paribas Securities Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC were the bookrunning managers.

Dubai’s Emirates NBD Bank PJSC priced $750 million five-year senior notes (A3//A+). The notes priced at par to yield 1.638%, or mid-swaps plus 115 bps.

Pricing came at the tight end of revised guidance, which was for a yield of mid-swaps plus 115 bps to 120 bps.

The order book was in excess of $2.2 billion at the time the deal was launched.

Emirates NBD Capital, ICBC, ING, Mizuho Securities and Standard Chartered Bank are bookrunners for the Regulation S deal.

Turkiye Sinai Kalkinma Bankasi AS priced a $350 million 5 7/8% sustainable five-year bond (B3//B+). The notes priced at 99.467 for a reoffer yield of 6%, or spread over U.S. Treasuries of 554.9 bps, according to a market source.

Pricing was well below initial talk for a yield of 6½% to 6 5/8%.

The order book for the sustainable bond was in excess of $2 billion at the time the deal was launched. That was significantly higher than the order book for the bank’s January 2020 bond, which had an order book in excess of $900 million.

Bank ABC, BNP Paribas, Citigroup (billing and delivery), Commerzbank, ING, SMBC Nikko and Standard Chartered Bank were joint bookrunners of the Rule 144A and Regulation S deal.

The Istanbul-based lender priced the senior notes under its $2 billion global medium-term note program.

China property deals

Country Garden priced $1.2 billion of notes this past week including $500 million of 2.7% senior notes due 2026 and $700 million of 3.3% senior notes due 2031, according to a company announcement.

The 2026 notes were priced at 99.944, and the 2031 notes were priced at 99.645.

Morgan Stanley, UBS, HSBC, BNP Paribas and J.P. Morgan Securities plc are joint global coordinators, joint lead managers and joint bookrunners for the Regulation S offering.

Proceeds are expected to be used for refinancing existing medium- to long-term offshore indebtedness, which will become due within one year.

Country Garden is a Foshan, China, real estate developer.

Gemdale, a Shenzhen, China-based real estate developer, launched a $2 billion medium-term note program, and China Cinda applied to list notes that may be issued from its $2 billion medium-term note program during the next 12 months. Cinda is a Beijing-based asset management, consulting, investment, and financial and risk management services company.

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