Emerging Markets: Primary market remains light; Total Play, Ipoteka-Bank bring deals

By Rebecca Melvin

New York, Nov. 13 – The emerging markets primary market was light for a second straight week with sovereign issue windows notably quiet as Covid-19 pandemic concerns flared and those surrounding the U.S. presidential elections subsided. The electoral college has not officially named the next U.S. president, but a Joe Biden administration looks all but certain.

Like last week, there was a smattering of corporate deals outside of Asia this past week. Two notable ones were a $575 million issue of five-year notes for Mexico’s Total Play Telecomunicaciones SA de CV and $300 million five-year notes for Uzbekistan’s JSCMB Ipoteka-Bank.

Total Play is a Mexico City-based online entertainment company, and Ipoteka-Bank is a lender based in Tashkent.

Last week a deal for Turkish confections company Ulker Biskuvi Sanayi AS – the first in corporate issuance for Turkey this year – brought a bit of excitement to the emerging markets debt market.

In terms of other benchmark-sized deals outside of China, Gulf International Bank BSC issued $500 million of 2 3/8% notes due Sept. 23, 2025 at 99.977, according to a notice on Monday.

First Abu Dhabi Bank, GIB Capital, HSBC and Standard Chartered Bank were the managers.

The bank is based in Manama, Bahrain.

For China, KWG Group Holdings Ltd. priced $400 million of 6.3% senior notes due Feb. 13, 2026 at par, according to a company announcement.

Merrill Lynch (Asia Pacific) Ltd., China Citic Bank International Ltd., CMBC Securities Co. Ltd., Goldman Sachs (Asia) LLC, Guotai Junan Securities (Hong Kong) Ltd., Haitong International Securities Co. Ltd., J.P. Morgan Securities plc and Standard Chartered Bank are the joint global coordinators, joint lead managers and joint bookrunners for the Regulation S notes (//BB-).

Proceeds will be used to refinance existing medium- to long-term offshore debt due within one year.

Some subsidiaries of the company will guarantee the notes.

KWG Property is a property developer based in Guangzhou, China.

In addition, CIFI Holdings (Group) Co. Ltd. issued $350 million of 5¼% senior notes due May 13, 2026 (BB-/BB, Lianhe: BBB-), according to a notice.

The notes can be redeemed at 102.625 starting on Nov. 13, 2023. Starting Nov. 13, 2024, the redemption price is 101, and then the notes can be redeemed at par starting on Nov. 25, 2025.

Credit Suisse (Hong Kong) Ltd., Haitong International Securities Co. Ltd. and HSBC Ltd. were joint global coordinators, joint bookrunners and joint lead managers on the Regulation S deal.

Bank of Communications Co., Ltd. Hong Kong Branch, Bank of East Asia, Ltd., China Citic Bank International Ltd. and CMB Wing Lung Bank Ltd. were joint bookrunners and joint lead managers.

Proceeds will be used for refinancing debt.

The company will seek a listing on the Hong Kong Exchange.

CIFI is a property development, investment and management business with headquarters in Shanghai.

After that, deals were typically smaller in the $100 million to $300 million range. Shenzhen, China-based property developer Redco Properties Group Ltd. priced $266 million of 9.9% senior notes due 2024 at 97.224 on Tuesday, and Guangzhou, China investment holding company China Aoyuan Group Ltd. issued $230 million of 5.98% senior notes due 2025 on Wednesday.

In addition, Jiayuan International Group Ltd. issued a $100 million add-on to its 12½% senior notes due 2023, according to a notice.

The notes will be consolidated and form a single series with the $200 million of 12½% senior notes due 2023 issued by the company on Oct. 8.

Listing of the Regulation S notes on the Stock Exchange of Hong Kong Ltd. is expected to take effect Friday.

Jiayuan International is a property developer based in Hong Kong.

Looking ahead, Kaisa Group Holdings Ltd. plans to issue an add-on to its 11.95% senior notes due 2023.

The new bonds will be offered on the same terms and conditions as the previous issue, save for the issue date and price.

Kaisa Group is a Shenzhen, China-based property development company.

In local currency deals, Taiwan’s E.Sun Financial Holding Co. Ltd. said it plans to price up to NT$3 billion of corporate bonds, according to a company notice on Friday.

The bonds will be issued in one or more tranches.

The bookrunners and timing will be based on market conditions, according to the company board’s resolution.

The financial services company is based in Taipei, Taiwan.

Total Play, Ipoteka-Bank deals

Total Play priced $575 million of five-year senior notes (B2//BB-) at par to yield 7½% in a Monday drive-by, according to a market source.

Pricing came at the tight end of talk for a yield of 7½% to 7¾%.

The notes are non-callable until Nov. 12, 2023.

Jefferies LLC (bill and deliver), Barclays and Credit Suisse Securities (USA) LLC are bookrunners for the Rule 144A and Regulation S offering.

BCP Securities LLC is also a bookrunner.

There is a poison put of 101 and an equity clawback for up to 40% of the notes.

Proceeds will be used to refinance debt, for capital expenditures and for general corporate purposes.

Ipoteka-Bank’s $300 million of five-year senior notes (BB-/BB-) priced at par to yield 5½%, or mid-swaps plus 503.3 basis points, according to a market source.

Holders may put the bonds at par if the Republic of Uzbekistan ceases to beneficially own 50% plus 1 share and an adverse ratings event occurs.

J.P. Morgan Securities plc, MUFG, Raiffeisen Bank International and Societe Generale were managers for the Regulation S deal.

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