Deals ahead from Bahrain, South Africa, Peru, Bermuda; investors eye interest rates, oil

By Christine Van Dusen

Atlanta, Sept. 28 – Several issuers advanced new deals – including Bahrain and Bermuda – as emerging markets investors kept an eye on the Federal Open Market Committee, oil prices and South Africa's MTN Group.

“In the aftermath of last week’s FOMC policy meeting, we have seen yields on U.S. Treasuries coming down steadily, with the 10-years currently trading around 1.56%, versus 1.70% a week ago,” a London-based analyst said. “We will see further Fed-speak over the next few days. Fed chair Yellen will deliver her semiannual testimony before the House Financial Services Committee, though the main focus will be on bank supervision and regulation.”

Oil prices were also on radar screens on Wednesday, as prices remained volatile but range-bound, he said.

“OPEC members will wrap up their informal meeting today, and it is hard to imagine that all can agree on an oil production freeze agreement,” he said. “Despite the apparent willingness of Saudi Arabia to curb its production and allowing for exemptions for some members in order to convince Iran to join, both countries stated that they didn’t expect any decision today on the need of further consultations.

“Instead, an agreement could be reached in November. While previous attempts have also failed, we note that there is a growing consensus among the OPEC members, which could prove supportive in future meetings.”

Investors were also watching South Africa-based MTN, which faced allegations that the carrier had illegally transferred $13.92 billion out of its largest market within the last 10 years.

The company's 4.755% notes due in 2024 were about 30 bps wider on the week in response, a trader said.

MTN shares dropped by 3.5% yesterday while the 4.755% MTNs due 2024 are about 30 bps wider on the week.

Oman draws orders

The new issue of notes from Oman – $1.5 billion in taps of its 3 5/8% notes due June 15, 2021 and its 4¾% notes due June 15, 2026 – received some attention on Wednesday, a market source said.

The $500 million 3 5/8% notes due 2021 priced at 100.905 to yield 3.414%, or Treasuries plus 230 bps. The notes were talked at Treasuries plus 230 bps to 235 bps.

The new $1 billion 4¾% notes due in 2026 priced at 100.317 to yield 4.708%, or Treasuries plus 315 bps. The notes were talked at a spread of Treasuries plus 315 bps to 320 bps.

Citigroup, JPMorgan, MUFG, National Bank of Abu Dhabi and Natixis were the bookrunners for the Rule 144A and Regulation S deal.

The book attracted more than $4.3 billion in orders, a trader said.

Bahrain sets roadshow

Bahrain will set out on a roadshow that is expected to end Oct. 3 for a benchmark-sized offering of eurobonds, a market source said.

The sovereign previously announced that it had mandated Bank ABC, BNP Paribas, Credit Suisse, JPMorgan and Standard Chartered Bank as bookrunners for an upcoming Rule 144A and Regulation S deal.

The roadshow will take place in the Middle East, the United States, Asia and the United Kingdom.

Saudi Arabia could delay

Market sources were also looking at Saudi Arabia, which could delay its upcoming issue of notes as a result of recent U.S. legislation related to allowing families of 9/11 victims to sue the kingdom, the analyst said.

“Former comments had hinted at a debt sale in October of at least $10 billion, although according to Saudi Arabia’s Finance Ministry, no decision has been made on timing and size,” he said.

UNB names bookrunners

Abu Dhabi’s Union National Bank PJSC named six bookrunners for its upcoming offering of dollar-denominated and benchmark-sized notes due in five years, a market source said.

ANZ, Commerzbank, HSBC, Mizuho, National Bank of Abu Dhabi and Standard Chartered Bank are the bookrunners for the Regulation S deal.

South Africa plans issuance

South Africa is planning to issue dollar-denominated notes due in 2028 and 2046, according to an announcement from the sovereign

Barclays Bank, HSBC, JPMorgan and Nedbank are the bookrunners for the deal, which will run concurrently with a tender offer.

The proceeds will be used for general purposes of the government, including financial investment and the refinancing, repurchase or retiring of domestic and external debt. A portion of the proceeds will also be used for liability management transactions, including the payment of the purchase price for the old notes.

The new notes are expected to price on Thursday.

Peru to print notes

Peru is planning to issue new notes alongside a tender offer, according to an announcement from the sovereign.

BBVA, BofA Merrill Lynch and HSBC will serve are the dealer managers.

The new notes, called bonos soberanos and therefore possibly offered in soles, will be offered under Rule 144A and Regulation S.

Other details were not immediately available on Wednesday.

Bermuda deal ahead

Bermuda is planning to issue new notes alongside a tender offer, according to an announcement from the sovereign.

The country is offering to purchase for cash up to $150 million of its 5.603% notes due 2020 and its 4.138% notes due in 2023.

HSBC is leading the transaction.

Fantasia sells bonds

On Tuesday, China’s Fantasia Holdings Group Co. Ltd. priced $400 million five-year notes at par to yield 7 3/8%, according to a company filing.

Guotai Junan International, ABC International, BofA Merrill Lynch and Citic CLSA Securities were the bookrunners for the Regulation S deal.

The proceeds will be used to refinance debt.

Fantasia Holdings is a property development company based in Shenzhen, China.

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