Emerging Markets: China Oilfield, Thai Oil price; IDB sells sukuk; Belarus, Alrosa bring deals

By Rebecca Melvin

New York, June 19 – The emerging markets primary market was dominated by issuers in the Asia and Central & Emerging European regions this past week. There were no significant deals priced by either Latin America or African issuers.

There was representation from the energy sector as well as banks and other corporate issuers from Asia.

China Oilfield Services Ltd. priced a two-part offering of guaranteed senior notes (A3//A) on Thursday, according to a notice.

The notes are being issued by wholly-owned indirect subsidiary COSL Singapore Capital Ltd. and are guaranteed by China Oilfield Services.

The first tranche consists of $500 million 1 7/8% guaranteed senior notes due June 24, 2025, priced at 99.867.

The second part is $300 million 2½% guaranteed senior notes due June 24, 2030, priced at 99.09.

Proceeds will be used to refinance debt and for general corporate purposes.

Also from the oil sector, Thaioil Treasury Center Co. Ltd., a wholly owned subsidiary of Thai Oil PCL, priced $1 billion of notes (Baa2/BBB+) in tranches due 2030 and 2050, according to a company news release.

A $400 million tranche of notes due 2030 priced with a coupon of 2½%.

A $600 million tranche of notes due 2050 priced with a coupon of 3¾%.

Proceeds will be used to help fund Thai Oil’s investment in its Clean Fuel Project.

Bangkok-based Thai Oil is a publicly traded oil and gas company.

The Philippines’ Jollibee Foods Corp. priced a $600 million dual-tranche offering of 5½-year and 10-year notes, according to a company news release.

The $300 million 5½-year notes priced with a coupon of 4 1/8%, and the $300 million tranche of 10-year notes priced with a coupon of 4¾%.

Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, BPI Capital Corp., Credit Suisse and UBS acted as joint lead managers and joint bookrunners for the Regulation S deal.

Proceeds will be used for general corporate purposes, including unforeseen eventualities that may be caused by the Covid-19 pandemic, and to fund initiatives of the company’s group of businesses.

The company said it has sufficient cash of PHP 26.5 billion, or $522.3 million, as of March 31 to fund liquidity to support its operations on a continuing basis and to meet all its obligations.

This is the company’s second tap of the capital markets this year and its third since the company’s initial public offering in 1993.

The multinational chain of fast food restaurants is based in Pasig, Philippines.

Also from the Philippines, PLDT Inc. priced $600 million of senior notes (BBB+) in two tranches, according to a company news release on Wednesday.

The $300 million 2½% long 10-year notes priced at 99.39 to yield 2.566%, or a spread of U.S. Treasuries plus 180 basis points. Pricing was tightened by 60 bps from initial talk.

The $300 million 3.45% 30-year notes priced at 99.168 to yield 3.495%, or 195 bps over Treasuries. Pricing was tightened by 65 bps from initial talk.

The order book was 17 times oversubscribed at $10.2 billion.

Credit Suisse (Singapore) Ltd. and UBS AG Singapore Branch were joint lead managers and joint bookrunners of the Regulation S notes.

The proceeds of the issuance of the notes will be used to refinance debt maturing in 2020 and 2021, prepay outstanding loans and finance capital expenditures.

PLDT is a telecommunications and digital services provider based in Manila, Philippines.

Shanghai-based lender New Development Bank priced a $1.5 billion three-year Covid-response bond (AA+/AA+) with a 5/8% coupon at 99.896 to yield 0.66%, according to a press release.

Proceeds will be used to finance sustainable development activities in the NDB’s member countries, including emergency assistance loans.

The emergency loans could be used to finance direct expenses related to the fight against the Covid-19 outbreak or provide support to governmental measures contributing to economic recovery.

Talk tightened 7 bps for a coupon of 5/8%.

Citigroup, Credit Agricole CIB, Goldman Sachs International, HSBC and JPMorgan are bookrunners of the notes, which mature June 23, 2023.

And the Industrial and Commercial Bank of China Ltd. listed a $20 billion medium-term note program with the Stock Exchange of Hong Kong, Ltd, according to a notice.

Industrial and Commercial Bank of China is the arranger and dealer.

The listing is expected to take effect on June 22 and remain in effect for one year.

The lender is based in Beijing.

For the Middle East, Islamic Development Bank priced a $1.5 billion Islamic sustainable bond due 2025 (Aaa/AAA/AAA) at par for a profit rate of 0.98% and spread over mid-swaps of 55 bps, according to a syndicate source.

Pricing was set tight to initial talk in the area of mid-swaps plus 70 bps.

The order book at the time of launch was more than $1.65 billion.

Citigroup, Credit Agricole CIB, Emirates NBD Capital, Gulf International Bank, HSBC, Islamic Corp. for the Development for the Private Sector, Natixis, Societe Generale and Standard Chartered Bank are joint lead managers and bookrunners for the Regulation S transaction.

The issuance falls under the lender’s sustainability issuance program and sustainable finance framework, and the proceeds will be used to help lender member countries deal with the aftermath of the Covid-19 pandemic.

The issuer is a Jeddah, Saudi Arabia-based lender.

Moving westward, the CEE’s Republic of Belarus priced $1.25 billion of notes in two tranches on Wednesday, according to a market source.

The $500 million tranche of 5 7/8% notes due Feb. 24, 2026 priced at 98.799 to yield 6 1/8% or a spread over U.S. Treasuries of 577.9 bps.

The $750 million tranche of 6 3/8% notes due Feb. 24, 2031 priced at par to yield 6 3/8% for a spread over Treasuries of 563.2 bps.

The combined order books for the long five- and 10-year notes closed at more than $4.8 billion.

Citigroup, Raiffeisen Bank International AG, and Societe Generale were joint bookrunners, with Renaissance Capital as joint lead manager of the Rule 144A and Regulation S tranches.

In addition, state-owned MFB Hungarian Development Bank Private Ltd. Co. priced €750 million 1 3/8% five-year notes at 99.44 to yield 1.492% or mid-swaps plus 180 bps, according to a regulatory announcement.

The spread was set tight to guidance that was in the mid-swaps plus 190 bps area and initial price talk for a yield in the area of mid-swaps plus 210 bps.

The order books closed north of €1.7 billion when guidance was released.

Erste Group, ING and JPMorgan are joint lead managers and joint bookrunners of the Regulation S offering.

And Russia’s Alrosa Finance SA priced $500 million 3.1% seven-year notes (expected ratings: Baa2/BBB-/BBB-) at par to yield mid-swaps plus 256 bps, according to a syndicate source on Thursday.

Alrosa PJSC is guarantor of the Rule 144A and Regulation S notes, which were sold via joint bookrunners J.P. Morgan Securities plc (global coordinator), Gazprombank, Societe Generale and VTB Capital.

The proceeds of the notes are expected to be used for discharging obligations under current bilateral loan agreements and for general corporate purposes.

Alrosa is a diamond mining business based in Mirny, Russia.

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