Saudi Electricity launches $2 billion notes in two parts; Sasol guides pricing on notes

By Rebecca Melvin

New York, Sept. 20 – Emerging markets debt saw a busy session on the primary side Thursday, with Saudi Electricity Co. launching $2 billion of notes in five- and 10-year maturities and South Africa’s Sasol Ltd. guiding pricing on a two-tranche deal to price imminently.

Also Inter-American Development Bank priced a £150 million tap of its 1¼% notes due 2023, and pricing emerged on China Construction Bank Corp. Hong Kong Branch’s $1 billion of three-year floating rate notes that priced at par to yield three-month Libor plus 0.75%.

Pricing also emerged on Islamic Development Bank, which priced $1.3 billion of five-year Islamic bonds at par with a profit rate of 3.389%, or mid-swaps plus 32 basis points, according to a syndicate source on Thursday.

The Regulation S sukuk priced tight compared to initial talk in the high 30 bps area over mid-swaps.

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

Meanwhile, Dubai-based DP World Ltd.’s four tranches of bonds in multiple currencies that priced on Tuesday were outperforming the market, with a London-based trader saying that the bonds “have stabilized and were seeing demand.”

DP World priced a $1 billion 10-year sukuk, or Islamic bond, at par with a coupon of 4.848%, or a spread of mid-swaps plus 175 bps; $1 billion of 5 5/8% 30-year notes that priced at 98.928 for a yield of 5.7%; €750 million of 2 3/8% eight-year notes priced at 99.089 to yield 2.5025%, or a yield spread of mid-swaps plus 170 bps; and £350 million 4½% 12-year notes priced at 98.897 for a yield spread of gilts plus 270 bps.

Overall the emerging markets debt market was seeing a solid tone on Thursday, the trader said.

Meanwhile, investors were digesting news that Turkey’s banks have signed a loan restructuring agreement to help the country’s corporate issuers, which are facing difficulties servicing their debt after the lira plunged 40% this year.

The Banking Association of Turkey announced on Wednesday an agreement that sets out a restructuring framework for the country’s banks faced with non-performing debt and includes credit availability. But critics of the agreement feel that is short on details and more will be needed to prevent a deluge of bad debt hitting lenders in the next year.

Saudi Electricity to price

Saudi Electricity, a majority state-owned utility, launched $2 billion of sukuk in five- and 10-year tranches (expected ratings: A2//A) on Thursday.

Pricing was expected later in the session.

The $800 million five-year tranche that is due in January 2024 was launched at mid-swaps plus 115 bps, and the $1.2 billion 10-year tranche was launched at mid-swaps plus 160 bps.

Citigroup, First Abu Dhabi Bank, HSBC, Mizuho, MUFG, Natixis and SMBC are among the bookrunners for the deal.

Sasol guides pricing

South Africa’s Sasol is also planning to finish pricing a dual trancher. It guided pricing on a 5½-year tranche to a yield 300 bps over U.S. Treasuries plus or minus 5 bps. That level was tightened from earlier guidance for yield in the low 300 bps over Treasuries.

The 10-year tranche was guided to a yield at 350 bps plus or minus 5 bps over Treasuries, from earlier guidance at high 300 bps over Treasuries.

Deal sizes were still not known at Prospect News’ deadline.

The notes are callable at par, and the issuer plans to list the notes on the New York Stock Exchange.

Sasol is a Johannesburg-based mining, energy and chemical company.

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