China Jinmao sells notes; investors eye Fed minutes; Yapi Kredi trades; roadshows underway

By Christine Van Dusen

Atlanta, Feb. 22 – China Jinmao Holdings Group Ltd. priced notes on Wednesday amid tighter spreads for emerging markets assets and brisk activity for the new issue from Turkey-based Yapi ve Kredi Bankasi AS (Yapi Kredi).

Also on Wednesday, Russian Railways JSC and Helios Towers Africa LLP were on roadshows for new deals, and Singapore’s United Overseas Bank Ltd. prepped two tranches.

For the most part, though, investors were focused on the Federal Reserve, which in its latest minutes indicated that a rate hike could take place sooner than expected.

“All eyes on the Fed minutes today that might reveal some insight in the assessment of the new Trump administration,” a London-based analyst said.

In deal-related news, Turkey’s Yapi Kredi saw its new $600 million issue of 5¾% notes due 2022 – which priced Tuesday at par to yield Treasuries plus 383.7 basis points – bring in more than $2 billion of orders, a trader said.

“We think that the issuer benefitted from strong goodwill following the cancellation of last year’s transaction, following the coup attempt and the recent maturity of the Yapi Kredi 6¾% 2017s,” he said.

The notes were initially talked in the 6 1/8% area.

“Given the somewhat expensive pricing, we saw sellers dominating, with the low print at 99.375 before the new notes recovered somewhat to trade around 99.60 bid, 99.75 offered,” he said on Wednesday morning.

Later in the session, the new notes were spotted at 99.725 bid, 99.825 offered. Near the close, the bonds were quoted at about 99.60 bid, 99.85 offered.

Garanti deal is ‘positive’

In other news from the Turkish banking sector, BBVA announced an increase in its stake in Turkiye Garanti Bankasi AS. The deal is expected to be complete during the first half of this year, the analyst said.

“BBVA already holds a majority representation at the board,” he said. “We therefore do not expect any immediate changes in the Turkish bank’s operations and strategy.”

Still, the step is “positive, in terms of BBVA’s commitment to Turkey and Garanti,” he said. “That said, we think that this is mostly priced in, with the Garanti curve trading among the most expensive in Turkey and 55 bps to 60 bps above the sovereign curve.”

Jinmao Holdings sells notes

In its new deal, China Jinmao Holdings priced $500 million 3.6% notes due 2022 via subsidiary Franshion Brilliant Ltd., according to a company filing.

HSBC, DBS Bank, Goldman Sachs, Standard Chartered Bank, BOC and Shanghai Pudong Development Bank were the bookrunners for the Regulation S deal.

The company is also offering to repurchase for cash Franshion’s $500 million 4.7% notes due 2017.

Other details were not immediately available on Wednesday.

China Jinmao is a Hong Kong-based investment holding company that invests in and develops real estate in mainland China.

Russian Railways on roadshow

Russian Railways is on a roadshow for a possible issue of euro- and ruble-denominated notes, a market source said.

JPMorgan and VTB Capital are the bookrunners for the deal.

Other details were not immediately available on Wednesday.

Russian Railways is a state-owned railway company based in Moscow.

Helios markets bonds

Helios Towers Africa is on a roadshow for a possible issue of dollar-denominated notes due in five years, a market source said.

BofA Merrill Lynch, Standard Bank and Standard Chartered are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow is expected to end on Feb. 28.

The telecommunications company is London-based and Africa-focused.

UOB to issue notes

Singapore’s United Overseas Bank is planning to price a two-tranche issue of dollar-denominated notes due in three years and euro notes due in five years, according to a company filing.

DZ Bank, HSBC, UBS and UOB are the bookrunners for the deal.

Hong Kong does deal

On Tuesday, Hong Kong priced a $1 billion issue of Islamic bonds due in 2027 at a yield of 3.132%, or Treasuries plus 68 bps, according to an announcement from the sovereign.

HSBC, Standard Chartered Bank were joint global coordinators, joint lead managers and joint bookrunners for the Regulation S deal. CIMB and National Bank of Abu Dhabi were joint lead managers and joint bookrunners.

The deal drew a final order of $1.72 billion from more than 88 orders, with 57% going to Asia, 25% to the Middle East and 18% to Europe. About 53% went to banks; 36% to fund managers, private banks and insurance companies; and 11% to sovereign wealth funds, central banks and supranationals.

KDB prints three tranches

Korea Development Bank priced $1.5 billion in three tranches of notes due 2020 and 2022 in a Securities and Exchange Commission-registered deal.

The deal included $500 million floating-rate notes due 2020 that priced at par to yield Libor plus 45 bps. The $500 million floating-rate notes due 2022 priced at par to yield Libor plus 70.5 bps.

The $500 million 2 5/8% fixed-rate notes due in 2022 priced at 99.489.

ANZ Securities, BofA Merrill Lynch, Citigroup, Commerzbank, Credit Agricole CIB, Credit Suisse and KDB Asia were the bookrunners.

The proceeds will be used for general operations, including extending foreign currency loans and repaying debt.

The lender is based in Seoul, South Korea.

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