Emerging Markets: CEE corporates bring deals as investors eyed Fed policy statement

By Rebecca Melvin

Concord, N.H., June 18 – The emerging markets primary market had lighter issuance output this past week ahead of and following the U.S. Federal Reserve’s two-day policy setting meeting. The central bank’s indication on Wednesday in its Federal Open Market Committee statement that it would raise rates in 2023 did not inspire a big move in the market. It kept rates unchanged, while also pointing to an earlier timeframe for interest rate increases amid higher expectations for inflation.

Meanwhile, Federal Reserve Chairman Jerome Powell said in press conference after the meeting that no decisions had yet been taken on ending or tapering the Federal Reserve bond buying program.

Latin America issuance was quieter and was expected to remain somewhat soft, according to market sources. But there were several deals this past week from far-flung corporates in Central & Eastern Europe.

The CEE offerings included green issuance. Emerging markets-focused CTP NV sold a €1 billion offering of green senior notes with four-year and eight-year maturities.

The real estate company priced €500 million of four-year notes at 99.657, and the €500 million eight-year tranche priced at 99.314.

J.P. Morgan AG, Goldman Sachs, UniCredit, Morgan Stanley, Raiffeisen and Societe Generale were managers for the Regulation S deal, which will trade on Euronext Dublin.

CTP owns and develops business parks in Central and Eastern Europe. The company has offices in Prague and Utrecht, The Netherlands.

Globe Trade Centre SA, a construction project developer and lessor based in Warsaw, sold a 2¼% inaugural green bond due June 23, 2026 (Ba1//BBB-), according to a company press release.

Orders for the deal were in excess of €1.4 billion and came from more than 120 accounts.

The bonds were primarily sold to fund managers, from real money accounts. Over half of the demand came from accounts in the United Kingdom.

The notes were issued with a discount of 99.471, according to a stabilization notice.

GTC Aurora Luxembourg SA is issuer of the notes.

Proceeds will be used to refinance a portfolio of eligible green assets according to the company’s green bond framework.

J.P. Morgan AG was the joint global coordinator, ratings adviser and green structuring agent.

Erste Bank, Morgan Stanley and Raiffeisen Bank International were also managers for the Regulation S deal, which is expected to be listed on Euronext Dublin.

On Friday, word emerged that the State Road Agency of Ukraine (Ukravtodor) sold $700 million 6¼% notes due 2028 (B) at par.

According to a post-stabilization notice and market sources, the Ukravtodor notes have a weighted average life of 6.25 years and J.P. Morgan Securities plc and Dragon Capital are stabilization managers of the Rule 144A and Regulation S deal, which will be listed on the London Stock Exchange.

Ukravtodor was established in 1990 and merged into a state-owned open stock company (Avtomobilni dorohy Ukrainy) in 2016. The agency governs automobile roads in Ukraine.

Moving south from CEE, Dubai Aerospace Enterprise (DAE) Ltd. sold $1 billion of 1.55% notes due Aug. 1, 2024 at a spread of 140 basis points over Treasuries, a market source told Prospect News.

The issuer is DAE Funding LLC.

The notes were talked in the Treasuries plus 175 bps area, a market source reported.

As reported on June 11, the company mandated BNP Paribas, Credit Agricole CIB, Emirates NBD, JPMorgan and Truist Securities as bookrunners of the Rule 144A and Regulation S deal. Fixed-income investor calls regarding the notes were held on Monday.

First Abu Dhabi Bank, Fifth Third Securities, Goldman Sachs International, HSBC, Mizuho Securities, Morgan Stanley and Natixis were also bookrunners for the CEEMEA issue.

The aerospace company is wholly owned by the Investment Corp. of Dubai and is based in Dubai, United Arab Emirates.

For China, Bocom Leasing Management Hong Kong Co. Ltd. issued $500 million 1 1/8% notes due 2024, according to a listing notice.

The notes were sold with a keepwell and asset purchase deed provided by Bank of Communications Financial Leasing Co., Ltd., under the company’s $6 billion medium-term note program.

The notes will be listed on the Hong Kong exchange on Monday.

Bank of Communications, Bocom International, Agricultural Bank of China Hong Kong Branch, ANZ, BNP Paribas, CMB International, HSBC, Haitong International, Mizuho Securities and Standard Chartered Bank were joint global coordinators, joint bookrunners and joint lead managers.

Bank of Communications is based in Shanghai.

Looking ahead, Korea Housing Finance Corp. selected banks and scheduled a series of fixed-income investor calls regarding an offering of euro-denominated five-year social covered bonds (expected rating: /AAA/), according to a preliminary offering circular.

BNP Paribas, HSBC, ING, Societe Generale and Standard Chartered Bank are the joint bookrunners and joint lead managers arranging the calls, which are slated to begin on Friday. KB Securities Co. Ltd. is co-manager.

A Regulation S and Rule 144A bond, backed by Korean residential mortgages, is expected to follow, subject to market conditions.

© 2015 Prospect News.
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