Emerging markets: Saudi Arabia prices $5 billion of notes; Armenia, Paraguay issue notes

By Rebecca Melvin

New York, Jan. 29 – The Kingdom of Saudi Arabia issued $5 billion of notes in two tranches due in 12 years and 40 years this past week as the emerging markets bond primary market continued to fire on all cylinders for the first month of 2021. January’s volume topped both January 2020 and January 2019, according to Prospect News’ data.

Saudi Arabia’s $2.75 billion of 12-year notes priced at 99.105, and the $2.25 billion of 40-year notes priced at par. The Rule 144A and Regulation S deal was sold via J.P. Morgan Securities plc, Goldman Sachs International, HSBC, BNP Paribas, Citigroup, NCB Capital and Standard Chartered Bank.

The Republic of Armenia sold $750 million of senior notes due 2031 (Ba3) at 97.738, according to a notice on Wednesday.

J.P. Morgan Securities, HSBC and Citigroup were bookrunners of the Rule 144A and Regulation S deal, which will be listed on the Euronext Dublin exchange.

Both deals followed on the Sultanate of Oman’s issuance in the prior week of an additional $500 million of 4 7/8% notes due 2025 at 101.547, $1.75 billion 6¼% notes due 2031 at par and $1 billion of 7% notes due 2051 at 96.959, according to notices.

Also for the Middle East and Africa region, West African Development Bank (Banque Ouest Africaine de Developpement) sold a €750 million 2¾% 12-year sustainability bond, according to a bank press release.

The notes priced with a spread of mid-swaps plus 300 basis points.

It is the bank’s first issue with sustainable development objectives.

More than 260 investors participated with demand at €4.4 billion during pricing.

Proceeds will be used to finance projects with a high social and environmental impact.

As earlier reported, J.P. Morgan Securities, HSBC and Natixis are managers for the Regulation S and Rule 144A offering.

The multilateral development bank is based in Lome, Togo.

Across the Atlantic, Paraguay sold an intraday offering of $600 million of new-money 2.739% notes (BB/BB+) with an 11-year tenor and a $225.97 million reopening of its 5.4% notes due 2050, according to a government notice.

The 2033 notes amortize in the last three years before they mature.

When Paraguay issued an 11-year bond in April 2020 the coupon was 4.95%.

The country also reopened its 2050 bonds with a 5.4% coupon to yield 4.089%.

Brazil remains active

Several issuers for Brazil followed on Marfrig Global Foods SA’s $1.5 billion of 3.95% bonds due 2031, which were issued earlier in the month amid strong demand.

Brazil’s largest grain and fiber company, Amaggi Luxembourg International Sarl, sold $750 million of sustainable notes in a debut issue this week with a 5¼% coupon and a maturity in 2028 (Ba3//BB), according to a company notice.

The notes are guaranteed by Andre Maggi Participacoes SA.

Proceeds will be used to finance a low-carbon economy through projects in line with the company’s socio-environmental policy and global sustainability positioning, as well as with the United Nations’ sustainable development goals.

Marketing was conducted via roadshow and involved more than 200 investors in a Rule 144A and Regulation S offering.

Klabin Austria GmbH, subsidiary of Klabin SA, sold $500 million of 3.2% notes with a 10-year tenor (BB+/BB+), according to a company notice.

The bonds have sustainability targets the company hopes to achieve in three targets related to the ESG criteria by 2025.

The company aims to reduce the consumption of natural resources and increase the recycling of both water and solid waste. Additionally, the third target is related to biodiversity, with the focus on sustainable management and restoration of biomes.

BofA Securities, Bradesco BBI, Citigroup, Itau BBA, JPMorgan and Morgan Stanley were bookrunners for the notes.

Klabin is a Sao Paulo, Brazil-based pulp, paper and paper products company.

CEE fires up

CPI Property Group priced €1 billion of senior unsecured and hybrid bonds in two tranches.

The company issued €600 million of new 1½% 10-year senior bonds (Baa2/BBB) and €400 million of new undated 3¾% subordinated notes (Ba1/BB+) callable in 2028.

Total investor demand for the offerings was nearly €3 billion, the company reported.

Proceeds from the offerings will be used for general corporate purposes and to repay more than €750 million of senior unsecured and undated subordinated bonds which are callable or mature in 2022, 2023 and 2024.

CPI Property is a Luxembourg-based real estate company focused on property investments in Central and Eastern Europe.

Czech Republic’s Komercni Banka AS sold €500 million 0.01% mortgage covered bonds with a five-year tenor (//AAA), according to a company notice.

The notes have a soft bullet maturity, or a one-year extension.

They priced at mid-swaps plus 12 bps, or a re-offer yield of 0.315%.

Initial price talk was in the mid-swaps plus 18 bps area. Talk was tightened to mid-swaps plus 14 bps and pricing ultimately came in under that talk.

The offer was approximately 2.5 times oversubscribed with over €2 billion in the order book.

The notes were marketed to investors via telephone meeting.

Societe Generale CIB was managing the deal as global coordinator and joint bookrunner.

Barclays and J.P. Morgan were joint bookrunners. Helaba and Nord/LB were co-managers.

The financial services company is based in Prague.

Turkiye Cumhuriyeti Ziraat Bankasi AS priced $600 million of 5 3/8% five-year sustainable bonds (expected ratings: B2//B+) at 99.445 to yield 5½%, for a yield spread of 509 bps over U.S. Treasuries, according to a market source.

The bank guided pricing to yield 5 5/8% to 5¾% from initial talk in the area of 5 7/8% yield. The order book stood at more than $1.1 billion at the time guidance was released.

BNP Paribas, Citigroup, HSBC, ICBC Standard Bank, JPMorgan and Mizuho Securities were the bookrunners of the Rule 144A and Regulation S deal.

The notes have a change-of-control put at par if Turkey ceases to control more than 50% of the ordinary shares of the bank.

And Republic of Slovenia priced €500 million of 0.6875% 60-year notes at 99.388 to yield 0.7%, or a spread of 75 bps over mid-swaps, according to a market source on Wednesday.

BNP Paribas, Deutsche Bank, Goldman Sachs Bank Europe SE and HSBC were bookrunners of the Regulation S transaction.

Korea issuers in the market

Korea Southern Power Co., Ltd. issued $450 million of ¾% notes due 2026 (Aa2//AA-) on Wednesday, according to a notice.

Citigroup Global Markets Inc., Credit Agricole CIB, Mizuho Securities USA LLC and UBS AG Hong Kong Branch are lead managers and bookrunners for the Regulation S and Rule 144A deal.

The electricity company is based in Busan, South Korea.

KEB Hana Bank issued €500 million of 0.01% five-year social covered bonds, according to a notice.

BNP Paribas, United Overseas Bank Ltd., Citigroup Global Markets Ltd., Credit Agricole CIB, J.P. Morgan Securities and Societe Generale are the lead managers and bookrunners for the offering.

The Bank of New York Mellon, London Branch is the principal paying agent.

The bank is based in Seoul, South Korea.

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