New deal from Hong Kong Airlines; investors eye Turkey, Halkbank; South Africa in focus

By Christine Van Dusen

Atlanta, March 30 – Hong Kong Airlines Ltd. was among the issuers to print notes on Thursday as investors continued to keep tabs on developments in South Africa, in Turkey and for Turkiye Halk Bankasi AS (Halkbank).

“The recent events in South Africa and the arrest of the deputy CEO of Halkbank continue to dominate the headlines,” a London-based analyst said. “In both cases, it is a wait and see game.”

Taking a closer look at Turkey, the U.S. Secretary of State visited Ankara on Thursday, and the relationship between the two countries appeared to be improving, the analyst said.

“Discussions will likely include the ongoing Syria conflict, the fight against [Daesh], extradition demands on Fethullah Gulen by Turkey and the recent arrest of Halkbank’s deputy CEO,” he said.

Said a trader, “After some initial selling of the Halkbank curve yesterday morning the bonds held in as we await more clarity on how the bank can be pulled into the scandal. Saw buyers of the 2017 late in the day.”

Downside risks remain, another trader said, so it is “unlikely that Halkbank bonds will recover fully from the recent sell-off anytime soon.”

Against this backdrop, the Turkish sovereign set the maturity date at April 6, 2023 for its upcoming issue of dollar-denominated and benchmark-sized Islamic bonds.

Dubai Islamic Bank, HSBC and Standard Chartered are the bookrunners for the deal.

“Turkey launched the six-year sukuk in the face of the turmoil around Halkbank,” a London-based trader said. “I’m sure it will pull in interest.”

South Africa turmoil continues

In South Africa, Finance Minister Pravin Gordhan and his deputy remained at risk of being fired by President Jacob Zuma.

Zuma is reportedly preparing to make this change – and several other changes – to his cabinet.

“The headlines over the last two days however hint that Zuma is facing increasing resistance within the ANC leadership and the current cabinet,” the analyst said. “With no doubt, there is no win-win situation.”

Saudi Arabia trades

From the Middle East, the three-tranche issue of notes due in 2021, 2026 and 2046 from Saudi Arabia continued to see some activity.

The 2 3/8% notes due in 2021 that priced at 99.007 to yield 2.588%, or Treasuries plus 135 basis points, were seen Thursday at 98.37 bid, 98.62 offered after Wednesday’s 98.18 bid, 98.43 offered and Tuesday’s 98¼ bid, 98.37 offered.

The 3¼% notes due in 2026 that priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, were at 97.37 bid, 97.62 offered after Wednesday’s 97.18 bid, 97.43 offered and Tuesday’s 97¼ bid, 97.37 offered.

And the 4½% notes due in 2046 that priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, were seen Thursday at 98.62 bid, 98¾ offered after Wednesday’s 98.38 bid, 98.63 offered and Tuesday’s 98.31 bid, 98.61 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.

Hong Kong Airlines sells notes

In its new deal, Hong Kong Airlines – via Blue Skyview Co. Ltd. – priced $315 million perpetual notes at par, according to a company announcement.

Societe Generale CIB was the bookrunner for the deal.

Other details were not immediately available on Thursday.

Indonesia Eximbank sells bonds

Indonesia Eximbank launched $500 million notes due in seven years at 3.9%, a market source said.

HSBC, MUFG Securities and OCBC Banka are the bookrunners for the Regulation S deal.

The notes are expected to settle on April 6.

The issuer is based in Jakarta.

4finance seeks issuance

Latvia’s 4finance SA is planning to issue up to $350 million of notes due in five years, according to a company announcement.

The proceeds will be used to refinance notes and for general corporate purposes.

Other details were not immediately available on Thursday.

4finance is a provider of short-term loans and is based in Riga, Latvia.

Petra Diamonds to sell notes

Emerging markets-focused Petra Diamonds Ltd. is planning to issue $600 million notes due 2022 via Petra Diamonds US$ Treasury plc, according to a company announcement.

The proceeds will be used to refinance the company’s $300 million 8¼% senior secured second lien notes due 2020, to repay all drawn bank facilities and for general corporate purposes.

Petra Diamonds is a St. Helier, Jersey, company that mines, processes and sells rough diamonds focused on mines in Tanzania and South Africa.

Gazprom prices notes

Russia’s Gazprom OJSC – via Gaz Capital SA – on Wednesday priced an £850 million issue of 4¼% loan-participation notes due April 6, 2024 at par to yield 4¼%, according to a company announcement.

JPMorgan, Deutsche Bank, Gazprombank and VTB Capital were the bookrunners for the Regulation S deal.

The proceeds will be used to finance a euro loan to PJSC Gazprom, which will be used for general corporate purposes.

The new notes closed at 100.43 bid, 100½ offered on Thursday.

“Some very good two-way throughout the session,” a trader said. “Plenty of retail demand all day.”

CBOM prints notes

Also on Wednesday, Russia’s Credit Bank of Moscow – via CBOM Finance plc – priced $600 million loan participation notes due 2027 at par, according to a company announcement.

Citigroup, Credit Suisse, HSBC, JPMorgan, Raiffeisen Bank International, Regions Securities and Societe Generale were the bookrunners for the deal.

Other details were not immediately available on Thursday.

Credit Bank of Moscow describes itself as a medium-sized universal bank operating in Moscow and the Moscow region.

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