Emerging Markets: Asia dominates primary; Flex, CMB International Leasing price notes

By Rebecca Melvin

New York, Aug. 14 – Although the primary markets for investment-grade and high-yield bonds remained active during the second full week of August, emerging markets bond issuance slowed to just a few benchmark-sized hard-currency transactions.

The volume of emerging markets bond issuance for 2020 is still ahead of last year at this time, however. There has been about $472 billion of emerging markets issuance in 786 deals for the year so far, compared to about $382.2 billion in 628 emerging markets bond deals for the same period last year, according to Prospect News’ data.

The notable emerging markets deals this past week included the issuance of Flex Ltd.’s upsized $575 million two-part reopening of existing senior notes, CMB International Leasing Management Ltd.’s $1.2 billion of notes in tranches maturing in 2025 and 2030, and Yiwu State-Owned Capital Operation Co., Ltd.’s $500 million of 2023 bonds.

Smaller deals also priced this past week, including Zhongtai Securities Co. Ltd.’s $300 million of 3.85% bonds due 2023 and Redco Properties Group Ltd.’s $300 million of 8˝% senior notes due 2021.

Yiwu subsidiary sells deal

Yiwu State-owned Capital Operation subsidiary Chouzhou International Investment Ltd. sold $500 million 3.15% bonds due 2023, which are guaranteed by Yiwu.

Standard Chartered Bank, Bank of Communications, Guotai Junan International, ABC International, Bank of China, BOCS International, China Citic Bank International, China Industrial Securities International, China Minsheng Banking Corp., Ltd., Hong Kong Branch, China Securities International, CMB Wing Lung Bank Ltd., DBS Bank Ltd., Industrial Bank Co., Ltd. Hong Kong Branch and Shanghai Pudong Development Bank Hong Kong Branch are the joint lead managers and joint bookrunners, with Standard Chartered, Bank of Communications and Guotai Junan as joint global coordinators.

Flex upsizes reopening

Flex, a Singapore-based consumer and industrial products manufacturer with U.S. headquarters in San Jose, Calif., priced an upsized $575 million two-part reopening of existing senior notes (Baa3/BBB-/BBB-) on Thursday following a virtual roadshow and fixed-income investor calls earlier in the week, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $250 million add-on to the company’s 3.75% notes due Feb. 1, 2026 priced at 109.294 to yield 1.921%, or a spread of Treasuries plus 160 basis points.

Initial price talk was at the Treasuries plus 180 bps spread area.

The reopening was upsized from $200 million.

Flex originally priced $425 million of the 3.75% notes on May 8 at 99.617 to yield 3.826%, or a spread of Treasuries plus 350 bps. The total outstanding is now $675 million.

Flex placed a $325 million tap of its 4.875% notes due May 12, 2030 at 114.863 to yield 3.058%, or a Treasuries plus 235 bps spread.

Initial price talk was in the Treasuries plus 255 bps area.

The add-on was upsized from $200 million.

The notes were first priced in a $325 million offering in the May 8 deal at 99.562 to yield 4.931%, or Treasuries plus 425 bps. The total outstanding is now $650 million.

BofA Securities, Inc., MUFG, SMBC Nikko Securities America, Inc., U.S. Bancorp Investments, Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Scotia Capital (USA) Inc. and UniCredit Capital Markets LLC were the bookrunners.

Proceeds will be used for general corporate purposes, including prepaying outstanding debt under the company’s term loan due June 2022 and reducing the level of accounts receivable sales under its asset-backed securitization programs. As of June 26, there was $433.4 million principal amount outstanding under the term loan.

CMB prices dual-tranche deal

CMB International Leasing Management sold $800 million of 1 7/8% notes due 2025 and $400 million of 2ľ% notes due 2030, under the company’s $20 billion medium-term note program.

The arrangers and dealers are Agricultural Bank of China Ltd. Hong Kong Branch, Bank of China, CMB International, Standard Chartered Bank, ANZ, CMB Wing Lung Bank Ltd., BNP Paribas, Shanghai Pudong Development Bank Hong Kong Branch, China Minsheng Banking Corp., Ltd. Hong Kong Branch, Citigroup, Industrial Bank Co. Ltd. Hong Kong Branch and UOB.

The company provides financial leasing to businesses in China.

Zhongtai, Redco price deals

Zhongtai Securities’ unit Zhongtai International Finance (BVI) Co. Ltd. priced $300 million of 3.85% bonds due 2023 at par.

The joint lead managers and joint bookrunners are Zhongtai International, China Citic Bank International, BOSC International, Haitong International, AMTD, Bocom International, Central Wealth Securities, China Merchants Securities (HK), China Minsheng Banking Corp., Ltd., CMB International, CMB Wing Lung Bank Ltd., Donxing Securities (Hong Kong), Everbright Sun Hung Kai, GF Securities, Guoyan Capital, ICBC Singapore, Industrial Bank Co., Ltd. Hong Kong Branch, Nanyang Commercial Bank, Shanghai Pudong Development Bank Hong Kong Branch and Zhongtai International (Singapore).

The joint global coordinators are Zhongtai International, China Citic, BOSC and Haitong International.

Zhongtai Securities provides financial services business, based in Jinan, China.

Redco Properties priced $300 million of 8˝% senior notes due 2021 at 98.885, according to a company announcement.

Credit Suisse, UBS, Barclays, BNP Paribas, Standard Chartered Bank, Haitong International, Deutsche Bank, HeungKong Financial, Orient Securities (Hong Kong), CRIC Securities and Bank of East Asia, Ltd. are the bookrunners for the Regulation S offering.

The company said it plans to use proceeds to refinance some existing debt.

The residential and commercial property developer is based in Shenzhen, China.

Banconal details emerge

Details emerged for Banco Nacional de Panama’s $1 billion of 2˝% 10-year notes (Baa1//BBB) in a debut offering, which sold last week.

The Banconal issue was oversubscribed with order books at $4.8 billion.

“It is the largest issue and at the lowest rate obtained by a financial institution in the country,” Javier Carrizo Esquivel, general manager of Banconal, said in the company’s announcement.

Credit Suisse and Goldman Sachs worked as bookrunners for the Rule 144A and Regulation S offering.

Proceeds will be used for general corporate purposes.

The bank is government-owned with headquarters in Panama.

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