New deals from TDB, Chexim; Turkey tightens; Brazil, ADB, Akbank take steps toward primary

By Christine Van Dusen

Atlanta, March 7 – The Eastern and Southern African Trade and Development Bank (TDB) and Export-Import Bank of China (Chexim) sold notes on a Tuesday that saw spreads tighten for Turkey and better selling for bonds from Pakistan.

Also on Tuesday, several issuers advanced deals, including Brazil, African Development Bank and Turkey’s Akbank TAS.

Looking to Turkey, spreads narrowed 4 basis points to 6 bps as the Central Bank continued to squeeze liquidity by pushing up the average cost of funding for banks, a London-based trader said.

That means the lenders will have to “source a larger portion of their funding from the expensive late liquidity window,” he said. “With the dollar bid taking a step back, post the Fed-hike re-price, we are seeing adding in the belly of the Turkey curve, retracing some of last weeks widening.”

From Hungary, some bonds were strong, he said.

“The belly remains heavy,” he said. “Surprised how resilient it is, given the tight spreads and pick-up in rates volatility, but I guess flows rule at the moment.”

Pakistan saw better sellers on Tuesday, he said.

“I think the 2024s look OK here versus the high-yield sovereign complex, but locals are selling,” he said. “Positioning isn’t favorable for more supply just yet.”

In trading from the Middle East, Oman’s bonds were active but the 2047s saw early sellers as rates leaked wider, he said.

“The belly feels firm there,” he said. “Qatar’s long end feels a touch heavy for choice alongside the [Ooredoo] curve, which has seen Asia sellers in.”

Bahrain’s curve was mixed, with buyers for the front end and two-way in the belly of the curve, he said.

TDB prices bonds

In its new deal, Burundi-based TDB priced $500 million 5 3/8% notes due March 14, 2022 at 99.46 to yield 5½%, a market source said.

The notes were talked in the 5 5/8% area.

Commerzbank, MUFG and Standard Chartered Bank were the bookrunners for the Regulation S offering.

The company has also announced a tender offer for up to $100 million of its outstanding 6 3/8% notes due December 6, 2018.

Issuance from Chexim

In another Tuesday deal, Chexim priced a €1 billion issue of ¼% notes due March 14, 2020 at 99.970 to yield mid-swaps plus 30 bps, a market source said.

Bank of China, Barclays, Bank of Communications, HSBC, JPMorgan and MUFG were the joint global coordinators for the Regulation S deal. ANZ, ING and Westpac were the joint lead managers and joint bookrunners.

The proceeds will be used for general corporate purposes.

Chexim is a lender based in Beijing.

Warba gives guidance

Kuwait’s Warba Bank set talk at 6½% to 6 5/8% for a perpetual issue of $250 million of Islamic bonds, a market source said.

Ajman Bank, Bank ABC, Emirates NBD, Standard Chartered, Abu Dhabi Islamic Bank, KAMCO Investment Co., Kuwait Finance House, Noor Bank and Warba Bank are leading the Regulation S deal.

The proceeds will be used to increase the lender’s capital reserves.

“There is somewhat of a risk that the bank has a relatively low profitability profile, which could negatively affect any future profit distributions on the planned AT1 sukuks,” a London-based analyst said.

Eros sets talk

India’s Eros International Media Ltd. set talk in the 8¼% area for a five-year issue of dollar-denominated notes, a market source said.

Barclays and Deutsche Bank are the joint bookrunners. Jefferies is the lead manager.

The notes come with two years of call protection.

Eros International is a Mumbai maker of movies.

Brazil plans tap

Brazil is looking to tap its 6% global bonds due April 7, 2026, according to a filing from the sovereign.

BNP Paribas, BofA Merrill Lynch and Citigroup are the bookrunners for the Securities and Exchange Commission-registered deal.

The original $1.5 billion notes were issued on March 17, 2016 at 99.066 to yield 6 1/8%, or Treasuries plus 419.6 bps.

The notes will include a make-whole call.

The proceeds will be used for general budgetary purposes.

ADB to issue notes

African Development Bank is planning a dollar-denominated and benchmark-sized issue of global SEC-exempt bonds, according to a company filing.

TD Securities, BofA Merrill Lynch, Daiwa Capital Markets Europe, Goldman Sachs International and JPMorgan are the bookrunners for the deal.

Pricing is expected to take place on Wednesday.

The issuer is a multilateral development bank based in Abidjan, Cote d’Ivoire.

Akbank on deck

Turkey’s Akbank TAS is expected to price a benchmark-sized and dollar-denominated issue of 10-year notes as soon as Wednesday, a market source said.

BofA Merrill Lynch, Citigroup, Goldman Sachs, HSBC, Societe Generale CIB and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The notes will be non-callable for five years.

Akbank is a lender based in Adana, Turkey.

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