Primary sees deals from ADB, Tunisia, Stoneway; EM unfazed by political uncertainty, rates

By Christine Van Dusen

Atlanta, Feb. 10 – Philippines’ Asian Development Bank (ADB), Tunisia and emerging markets-focused Stoneway Capital Corp. priced notes on a Friday that was solid for emerging markets assets, even amid rates volatility and uncertainty about U.S. fiscal policy.

Europe faces its own political uncertainty, with concerns about the French elections.

“Concerns also remain amid a rift between European Union institutions and the International Monetary Fund on Greece’s bailout,” a London-based analyst said.

But emerging markets assets were still on solid ground.

“The market backdrop for EM remains solid, despite Trump’s promise to deliver a ‘phenomenal’ corporate tax announcement within the next three weeks,” he said.

Emerging market spreads remain “unimpressed and have further tightened over the week,” he said. “Outperformers include high-yielding Sub-Saharan Africa and Latin American sovereigns.”

Underperformers included Ghana – which was still dealing with reports of undisclosed spending – and Ivory Coast, where a military mutiny took place.

“While [Turkey’s] sovereign curve took a breather, banks continued to rally, 12 basis point tighter on average,” he said.

Meanwhile, China released strong trade figures, with a rise in exports and imports.

“Many question marks remain, going forward, with the new U.S. administration in place,” the analyst said. “But in a conciliatory phone call between the presidents of both countries, Trump said that he honored the ‘One China’ policy, which might appease some political hawks in both governments.”

Oil prices on Friday continued to recover, he said.

“It is otherwise fairly calm in news flow this morning, and not even the brawl inside and outside South Africa’s parliament yesterday during Zuma’s State of the Nation Address can be considered as something surprising,” the analyst said.

Nigeria attracts orders

The final book for Nigeria’s new issue of notes –$1 billion 7 7/8% notes due in 2032 that priced Thursday at par – was more than $7.8 billion, a market source said.

The notes were initially talked at a yield in the 8½% area.

Citigroup and Standard Chartered were the bookrunners for the Rule 144A and Regulation S deal.

ADB sells bonds

In its new deal, Philippines’ ADB priced $3.75 billion 2% notes due Feb. 16, 2022 at 99.434 to yield Treasuries plus 26.95 bps, according to a company announcement.

The notes were initially talked at a spread in the 19 bps area.

BofA Merrill Lynch, HSBC, Morgan Stanley and TD Securities were the bookrunners for the deal.

ADB, based in Manila, focuses on reducing poverty in Asia and the Pacific through economic growth, environmentally sustainable growth and regional integration.

Tunisia issues

Tunisia priced €850 million notes due in 2024 (expected rating: Ba3//B+) at 5¾%, a market source said.

Natixis, Commerzbank and JPMorgan were the bookrunners for the Regulation S deal.

The proceeds will be used for general financing purposes.

Other details were not immediately available on Friday.

Stoneway prices notes

In another new deal, Stoneway Capital priced a $500 million issue of 10% notes due March 1, 2027 at par to yield 10%, according to a company filing.

Jefferies was the bookrunner for the Rule 144A and Regulation S deal.

The notes are non-callable for five years and include a change-of-control put at 101.

The proceeds will be used to help fund four simple-cycle power plants in Argentina.

Stoneway Capital, a private company with equity contributed by Siemens AG, was formed for the purpose of constructing, owning and operating four simple-cycle power-generating plants in the Buenos Aires region of Argentina. The company has secured four Power Purchase Agreements through Argentina’s Ministry of Energy and Mining for a 10-year period on each.

Stoneway Capital is incorporated in New Brunswick, Canada.

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