Emerging Markets: Greece, Croatia price large euro deals; DIB, Sharjah, Credicorp issue

By Rebecca Melvin

New York, June 12 – While the emerging markets debt market remained active this past week it was not as busy as the previous week. There were some $14.5 billion of new, hard-currency emerging markets notes that priced this week, compared to about $16.5 billion the previous week, according to Prospect News’ data.

Greece priced the blockbuster of the week with €3 billion of 1½% 10-year notes (expected ratings: B1/BB-/B) on Tuesday at 99.375 to yield 1.568%, or mid-swaps plus 160 basis points, according to a market source.

BNP Paribas, BofA Securities, Deutsche Bank, Goldman Sachs, HSBC and J.P. Morgan Securities plc are joint bookrunners of the Regulation S deal.

Listing on the Athens exchange is expected.

The Republic of Croatia was a notable issuer, bringing €2 billion of 1½% 11-year notes (Ba2/BBB-/BBB-) on Wednesday at 98.572 to yield 1.643%, or mid-swaps plus 165 bps, according to a syndicate source.

The spread was tightened from initial price talk for a yield of mid-swaps plus 210 bps area.

JPMorgan (billing and delivery), Banca IMI/Privredna banka Zagreb, Barclays and Deutsche Bank were bookrunners of the Regulation S notes.

The notes are expected to be listed on the Luxembourg Stock Exchange’s regulated market.

There were a pair of Middle Eastern issuers that priced $1 billion issues. They were Dubai Islamic Bank PJSC (A3//A) and the government of Sharjah.

DIB priced a $1 billion offering of 2.95% Islamic bonds due 2026. The sukuk came with a yield of 245 bps over mid-swaps. The issue is the first benchmark sukuk from a regional financial institution since the beginning of the Covid-19 pandemic.

The order book on the deal was over $4.5 billion from over 170 investors.

The bank mandated Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, ICBC, the Islamic Corp. for the Development of the Private Sector, KFH Capital, Sharjah Islamic Bank and Standard Chartered Bank as joint lead managers and bookrunners of the Regulation S notes.

Dubai Islamic is the largest Islamic bank in the United Arab Emirates.

The Sharjah Sukuk Program issued $1 billion of trust certificates due 2027 on behalf of the government of Sharjah. The series 10 sukuk will be listed on the Irish Stock Exchange.

There were a number of deals of between $500 million and $1 billion. They included Africa Finance Corp., which priced $700 million 3 1/8% five-year notes, according to a news release on Friday.

The bond is the fifth issuance under the corporation’s $5 billion medium-term note program, which was recently upsized from $3 billion and is rated A3 by Moody’s Investors Services, according to the release.

The issuance also received strong interest across Europe, Asia and the Middle East, leading it to be about three times oversubscribed with an order book of $2.1 billion.

BofA Securities, JPMorgan, MUFG, First Abu Dhabi Bank and Goldman Sachs are bookrunners on the Regulation S deal, the proceeds of which will be used for general corporate purposes.

Africa Finance is Lagos, Nigeria-based infrastructure-financing entity.

Credicorp Ltd., a financial services holding company based in Lima, Peru, priced $500 million 2¾% five-year notes (BBB/BBB+) to yield 2.867%, or yield spread of 250 bps over U.S. Treasuries, according to a company news release on Thursday.

The offering received more than $4 billion of demand from nearly 200 institutional investors in Latin America, the United States, Europe and Asia, the release stated.

The transaction marks Credicorp’s inaugural public debt offering at the holding company level. Credicorp intends to use the net proceeds to fund general corporate purposes and increase the company’s liquidity position.

The issuance is expected to settle on June 17, subject to customary closing conditions.

BofA Securities, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, are acting as joint bookrunning managers for the offering.

Credicorp was the sole issuer from Latin America. The lighter presence of the region this week created a hole in volume after a number of very large deals for the region last week including $3.5 billion for Brazil, $2 billion for Colombia and $1 billion for Mexico’s Cemex SAB de CV, which priced a 7 3/8% senior secured note due 2027.

Also among the issuers bringing benchmark deals were Hongkong Electric Co. Ltd., Albania, China Mengniu Dairy Co. Ltd., Helios Towers plc, MGM China Holdings Ltd., and a unit of PTT Exploration and Production PCL. International Container Terminal Services Inc. priced a $400 million deal.

Hongkong Electric priced $500 million of 2¼% notes due 2030. Albania priced €650 million of 3.65% seven-year notes at 99.239, according to market sources on Wednesday.

The Rule 144A and Regulation S notes were initially talked to yield in the area of 4 1/8%.

Banca IMI, Citigroup, JPMorgan and Raiffeisen Bank were joint bookrunners of the issue, which is to be listed on the Irish Stock Exchange.

China Mengniu Dairy priced $800 million of notes in two tranches including a $500 million tranche of 1 7/8% notes due 2025 and an issue of $300 million 2 ½% notes due 2030.

The dairy company is based in Hong Kong and will use the proceeds to repay debt and for general corporate purposes.

Helios Towers plc announced that it priced an upsized $750 million of 7% notes due 2025 at 99.439.

The proceeds will be used to redeem all of HTA Group’s outstanding senior notes due 2022 and to repay amounts outstanding under the company’s $125 million term facility, of which $75 million was outstanding as of June 8, and for general corporate purposes, according to a company news release on Wednesday.

MGM China priced $500 million of five-year senior notes at par to yield 5¼% and a unit of Thailand’s PTT E&P company priced $500 million of 2.587% notes due 2027.

The Philippines’ International Container priced $400 million of notes. The 4¾% senior notes priced at 99.607 via Citigroup Global Markets Ltd., Credit Suisse (Hong Kong) Ltd. and J.P. Morgan Securities plc as joint lead managers, and proceeds of the Regulation S deal will be used to refinance and extend the maturity of the company’s liabilities and for general corporate purposes.

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