Africa, Middle East dominate deal flow in EM; Oman prices $2 billion of seven-year notes

By Rebecca Melvin

New York, May 23 – At least four dollar-denominated deals were priced in the emerging markets by African and Middle Eastern issuers on Tuesday. But the primary markets in Latin America and other regions were quiet. The Export-Import Bank of Korea priced a euro-denominated deal on Monday.

In the Middle East, Oman priced $2 billion of seven-year notes at par; Bahrain’s Al Baraka Banking Group BSC backed $400 million tier 1 perpetuals at par; and Turkiye Vakiflar Bankasi TAO (Vakifbank) priced $500 million 5.65% five-year bonds slightly below par, or at 99.892. In Africa, Zenith Bank priced $500 million 7 3/8% five-year notes at par.

Each of these deals saw some after-market trading action in New York, according to a trader.

The $2 billion of seven-year notes priced by Oman to yield 4.397% came at a significantly tighter mid-swaps rate than initial price talk. The rate was mid-swaps plus 235 basis points, compared to 270 bps initially talked and then revised down to 250 bps.

Citigroup, HSBC, JPMorgan, Standard Chartered, Alizz Islamic Bank and Dubai Islamic Bank are the joint bookrunners for that deal.

In March, Oman priced $5 billion of notes due in five, 10 and 30 years to yield at issue 3.989%, 5 7/8% and 6.549%, respectively.

Among Oman’s existing issues, the shorter duration 3.875% paper due 2022 was indicated at a price of 100.62 bid, 101.12 offered, according to a market source. The longer duration 2026 paper with a 4¾% coupon was indicated slightly below par at 99.37 bid, 99.87 offered.

Istanbul-based Vakifbank priced $500 million of 5.65% five-year bonds on a yield basis, not a swap basis. The price was slightly below par at 99.892, according to a syndicate source.

Talk on the notes was for a coupon of 5¾%, and the yield for these notes at issue stands at 5.8%.

Lead managers for the deal were Commerzbank, Erste Group, Goldman Sachs, HSBC, JPM and Natixis.

ABG Sukuk Ltd. issued $400 million tier 1 perpetuals, guaranteed by Bahrain’s Al Baraka Banking Group, at par to yield 7 7/8%, which was tighter than the 8% to 8¼% initial talk for that Regulation S paper.

Meanwhile, Lagos, Nigeria-based Zenith Bank priced $500 million of 7 3/8% five-year notes at par via joint bookrunners Citigroup and Goldman Sachs.

The deals followed on the heels of National Bank of Kuwait’s $750 million bond issue on Monday at mid-swaps plus 100 bps, which was tighter than talked.

In Latin America, sovereign issuers were quiet, and Brazil remained an underperformer in the secondary market for much of the session. But late in the day, Brazil caught a bid that was likely due to short covering, a trader suggested.

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