Emerging Markets: China brings $6 billion four-part deal; Petrobras adds; Slovenia prices

By Rebecca Melvin

New York, Oct. 16 – The People’s Republic of China was a singularly notable issuer this past week, bringing a $6 billion four-part sovereign deal in Wednesday’s session. The bulk of the week’s other hard-currency issues priced on Thursday.

China’s Ministry of Finance issued under Rule 144A and Regulation S

• $1.25 billion of three-year notes with a 0.425% yield;

• $2.25 billion five-year bonds with a 0.604% yield;

• $2 billion of 10-year notes with a 1.226% yield; and

• $500 million of 30-year notes with a 2.31% yield.

The issue marks the fourth time China has tapped that market since 2017.

The offer was 4.7 times oversubscribed, and all tranches priced 5 basis points to 10 bps tighter than talk.

Also on the sovereign side, Republic of Slovenia priced early in the week €1 billion of 0.4875% 30-year notes at 99.847 to yield 0.493%, or a spread of 50 bps over mid-swaps.

Pricing on Tuesday came at the wide end of mid-swaps plus 45 bps to 50 bps guidance, following earlier guidance in the mid-swaps plus 55 bps area and mid-swaps plus 65 bps area.

The order book was in excess of €5.75 billion at the time launch information was released.

Barclays, Commerzbank, Goldman Sachs International Bank, J.P. Morgan and UniCredit are bookrunners of the Regulation S transaction.

Petroleo Brasileiro SA (Petrobras) priced $1 billion of 5.6% global notes due Jan. 3, 2031 on Tuesday at 109.579 to yield 4.4%, according to an FWP filing with the Securities and Exchange Commission.

The notes will be issued through wholly owned subsidiary Petrobras Global Finance BV and guaranteed by the parent company.

The notes will be consolidated, form a single series and be fully fungible with the $1.5 billion 5.6% notes due 2031 issued on June 3.

BofA Securities, Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Itau BBA USA Securities, Inc., J.P. Morgan Securities LLC, Santander Investment Securities Inc. and Scotia Capital (USA) Inc. are the joint bookrunners for the SEC-registered deal.

Proceeds from the tap issue will be used to purchase notes under concurrent tender offers. Any remaining proceeds will be used for general corporate purposes.

Petrobras is an oil and gas company based in Rio de Janeiro.

On Wednesday, Kasikornbank PCL, acting through its Hong Kong Branch, issued $500 million additional tier 1 perpetual subordinated notes, with a 5.275% coupon, on Wednesday, according to a notice.

BNP Paribas, Citigroup Global Markets Ltd. and Standard Chartered Bank are the lead managers and bookrunners.

The bank is based in Bangkok.

Another sovereign issuer was the State of Israel, which priced a €400 million add-on to its 2 7/8% senior notes due Jan. 29, 2024 at 109.43, according to a term sheet.

The notes will be consolidated and form a single series with the outstanding €3.15 billion of 2024 notes.

The notes were issued under the sovereign’s €20 billion euro medium-term note program.

Merrill Lynch International was manager of the Regulation S deal, which was non-syndicated.

Indonesia geothermal company Star Energy Geothermal (Salak-Darajat) Restricted Group (SEGSD RG)’s wholly owned subsidiaries, Star Energy Geothermal Darajat II, Ltd. and Star Energy Geothermal Salak, Ltd., issued $320 million of 3¼% senior secured notes due 2029, according to a notice.

The companies also issued $790 million of 4.85% senior secured notes due 2038, according to a separate notice.

Credit Suisse, DBS Bank Ltd., Deutsche Bank are the bookrunners for the 2029 notes. Credit Suisse, DBS Bank, Deutsche Bank, Barclays and BPI Capital Corp. are bookrunners for the 2038 notes.

Poland-based metal can supplier Canpack SA priced two tranches of senior notes (Ba2/BB) on Thursday, according to market sources.

The deal, which was heard to be playing to high-yield and emerging markets accounts in Europe and the United States, included €600 million of 2 3/8% seven-year notes that priced at par to yield 2.38%, tight to talk in the 2½% area.

The offering also included $400 million 3 1/8% five-year notes that priced at par to yield 3.13%, tight to talk in the 3¼% area. Initial talk on the dollar notes was in the mid-to-high 3% area.

Global coordinator and physical bookrunner Citigroup will bill and deliver for the euro-denominated notes. Global coordinator and physical bookrunner Wells Fargo Securities LLC will bill and deliver for the dollar-denominated notes. BNP Paribas was a passive bookrunner.

The co-issuer is Eastern PA Land Investment Holding LLC, representing Canpack’s operations in the United States.

The metal container supplier, which is based in Krakow, Poland, plans to use the proceeds to repay some amounts outstanding under its revolver, to redeem its private placement notes and for general corporate purposes, including capital expenditure requirements to construct a new plant in Pennsylvania.

And Kazakhstan’s state-owned oil and gas company JSC NC KazMunayGas sold $750 million 3½% notes due 2033 (Baa3//BBB), according to a final term sheet.

The Rule 144A and Regulation S notes were issued at par.

The notes were issued under the company’s $10.5 billion medium-term note program.

Proceeds were expected to be used to refinancing the company’s two series of notes due 2022 and 2023, according to Moody’s Investors Service.

Meanwhile, Jeddah, Saudi Arabia-based financial company Islamic Corp. for the Development of the Private Sector (ICD) sold $600 million 1.8% trust certificates due 2025 at par (A2/A/A+), according to a final term sheet.

The certificates are being issued by ICDPS Sukuk Ltd. and guaranteed by ICD.

Standard Chartered Bank is the arranger for the Regulation S issue.

Dealers for the notes are Bank ABC, CIMB, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Gulf International Bank, Goldman Sachs International, HSBC, Maybank, Mizuho Securities, SMBC Nikko, Standard Chartered Bank and Warba Bank.

Uzbekistan-based commercial bank, National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU), sold $300 million 4.85% senior eurobonds due Oct. 21, 2025 at par (BB-/BB-), according to a press release.

Citibank (bill and deliver), Natixis, SMBC Nikko and Gazprombank worked as bookrunners, specifically heading efforts in the United States, France, Japan and Russia respectively.

Talk was for a coupon in the low 5% to 5¼% range. The issue was 2 times oversubscribed.

NBU follows on the heels of a successful placement of eurobonds in 2019 by the republic.

Proceeds will be used for general banking business.

A roadshow was held on Oct. 12 and Oct. 13.

On Friday, China Development Bank announced that it has mandated banks as joint bookrunners and joint lead managers regarding proposed U.S. dollar- and euro-denominated, single or multi tranches of senior notes (expected rating: A+), according to a market source.

The Regulation S tranches are being planned under the issuer’s $30 billion debt issuance program, and they will be offered subject to market conditions.

The banks for the dollar notes are Bank of China, Agricultural Bank of China Ltd. Hong Kong Branch, China Construction Bank, Bank of Communications, ANZ, DBS Bank Ltd., HSBC, Mizuho Securities, MUFG and Standard Chartered Bank.

The banks for the euro notes are Bank of China, ICBC, China Construction Bank, BNP Paribas, Credit Agricole CIB, Deutsche Bank and DZ Bank.

The lender is based in Beijing.

And Country Garden Holdings Co. Ltd. priced $500 million of 3 1/8% senior notes due 2025 and $500 million of 3 7/8% senior notes due 2030 on Thursday, according to a company announcement.

The 2025 notes were priced at 99.904, and the 2030 notes were priced at 99.745.

Morgan Stanley & Co. International plc, UBS AG Hong Kong Branch, Goldman Sachs (Asia) LLC, BNP Paribas, Hongkong and Shanghai Banking Corp. Ltd. and J.P. Morgan Securities plc are joint global coordinators, joint lead managers and joint bookrunners for the Regulation S offering (Baa3//BBB-).

Proceeds are earmarked for refinancing existing medium- to long-term offshore debt that will become due within one year.

Country Garden is a Foshan, China, real estate developer.

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