Halkbank and upcoming deal eyed after exec’s arrest; EM trading mixed; AFC markets notes

By Christine Van Dusen

Atlanta, March 28 – On a mixed Tuesday for emerging markets assets, Turkey-based Turkiye Halk Bankasi AS (Halkbank) was eyed after a top banker at the company was arrested in the United States.

The banker is accused of helping a financier in Iran circumvent federal sanctions, news that had investors wondering whether Halkbank’s upcoming dollar-denominated issue of benchmark-sized notes due in 10 years could be derailed. BofA Merrill Lynch is leading the deal.

Meanwhile, other emerging markets names continued to chug along.

“Yesterday was a day of reflection rather than action as accounts were more inclined to see if the United States Treasury rally held than take advantage of the spread widening,” a London-based trader said. “That was certainly the reason for the slow book build of the National Bank of Abu Dhabi five-year seniors.”

The deal – $587 million green bonds due 2022 that priced Monday at a spread of mid-swaps plus 98 basis points – “just didn’t grab people’s attention,” he said. “But printing at mid-swaps plus 98 bps, there was a cushion to any Treasury move.”

BofA Merrill Lynch, Citigroup, Credit Agricole CIB, HSBC, MUFG Securities and National Bank of Abu Dhabi were the bookrunners for the Regulation S deal.

The proceeds will be used to finance green projects.

Investors were also keeping an eye on South Africa, where Finance Minister Pravin Gordhan was expected to be fired.

“Today we see some more fall-out from Gordhan-gate as the South African rand continues to weaken and bonds are under pressure,” the trader said.

Asia in focus

Looking to Asia, the session was mixed and range-bound for investment-grade corporate bonds, a trader said.

“Today sees spreads from unchanged to 1 bp tighter, in general, but once again activity is limited to a handful of names,” he said.

Financial names were firm, another trader said, with spreads 1 bp to 2 bps tighter.

“Flow still relatively light, with clients sidelined before month-end,” he said.

High-yield sovereigns from Asia were “firmer as well, with Philippines cash unchanged to 1 bp to 2 bps tighter on spread,” another trader said.

Saudi Arabia trades

From the Middle East, the three-tranche issue of notes due in 2021, 2026 and 2046 from Saudi Arabia saw some activity on Monday.

The 2 3/8% notes due in 2021 that priced at 99.007 to yield 2.588%, or Treasuries plus 135 bps, were seen at 98¼ bid, 98.37 offered after Monday’s 98.18 bid, 98.43 offered and Friday’s 97.81 bid, 98.06 offered.

The 3¼% notes due in 2026 that priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, were flat at 97¼ bid, 97.37 offered after Friday’s 96.93 bid, 96.98 offered.

And the 4½% notes due in 2046 that priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, were seen Tuesday at 98.31 bid, 98.61 offered after Monday’s 98.38 bid, 98.63 offered and Friday’s 98.05 bid, 98.15 offered.

Citigroup, HSBC, JPMorgan, Bank of China, BNP Paribas, Deutsche Bank, Goldman Sachs, MUFG Securities, Morgan Stanley and NCB Capital were the bookrunners for the Rule 144A and Regulation S deal.

AFC sets roadshow

Nigeria’s Africa Finance Corp. (AFC) will set out on Thursday for a roadshow to market a dollar-denominated issue of benchmark-sized notes due in up to 10 years, a market source said.

Citigroup, JPMorgan, MUFG and Standard Chartered Bank are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will be held in Europe, the United States, the United Arab Emirates and Asia.

AFC is an infrastructure-financing company based in Lagos.

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