Emerging Markets: Saudi Aramco prices mega deal; Mexico, Uzbekistan represent sovereigns

By Rebecca Melvin

New York, Nov. 20 – A number of notable new issues priced in the emerging markets primary market this past week including both corporate and sovereign issues, while the forward calendar grew as issuers gauged the temperature of the capital markets before year-end, according to Prospect News’ data.

Saudi Arabian Oil Co. (Aramco) priced $8 billion of notes in five tranches (A1//A), and Mexico priced about $6.6 billion of notes (Baa1/BBB/BBB-) in two tranches on Monday.

In euro-denominated offerings, China priced €4 billion of senior notes (A1) due in five, 10 and 15 years, according to a market source.

VEON Holdings BV priced $1.25 billion of 3 3/8% senior notes due 2027 on Wednesday, according to a news release.

The government of Uzbekistan priced more than $750 million equivalent of notes in a dual currency deal denominated in both U.S. dollars and Uzbek som.

Bank of Communications Co., Ltd. sold $2.8 billion of 3.8% undated capital bonds (//BB+), according to a market notice.

The initial distribution rate is 3.8%. The distribution rate on the Regulation S issue will be reset every five years.

And joining Mexico for the Latin America region, Suzano SA priced an add-on of $500 million to its $750 million of 3¾% senior notes due Jan. 15, 2031 (BBB-/BBB-) through Austrian subsidiary Suzano Austria GmBH.

Saudi Aramco bags mega deal

The state-owned oil company priced $8 billion of notes in five tranches, which all tightened down during marketing to price well below initial price talk.

The deals included a $500 million tranche of three-year notes priced at 99.783 to yield 110 basis points over Treasuries. The notes were heard to have been initially talked to yield in the area of 140 bps over Treasuries.

A $1 billion tranche of five-year notes priced at 99.967 to yield 125 bps over Treasuries. The tranche had initially been talked in the area of 155 bps over Treasuries.

A $2 billion tranche of 10-year notes priced at 99.405 to yield U.S. Treasuries plus 145 bps. The notes were initially talked at a spread of Treasuries plus 175 bps.

A $2.25 billion tranche of 30-year notes priced at 99.052 to yield 3.3%. The notes were initially talked at a spread of Treasuries plus 205 bps.

A $2.25 billion tranche of 50-year notes priced at 98.834 to yield 3.55%. The notes were initially talked at a spread of 230 bps over Treasuries.

The bookrunners for the Rule 144A and Regulation S deal were JPMorgan and Morgan Stanley. Joining as dealers are Citigroup, Goldman Sachs International, HSBC and NCB Capital.

Proceeds are expected to be used for general corporate purposes.

The issuer is a Saudi Arabian state-owned oil company.

Mexico brings two tranches

The proceeds of $6.6 billion of notes in two tranches that Mexico priced are expected to be used to fund a tender offer of notes.

The sovereign priced $3,396,081,000 of 2.659% notes due May 24, 2031 at par to yield a spread of 175 bps over U.S. Treasuries and $3,208,201,000 of 3.771% notes due May 24, 2061 at par for a yield spread of 210 bps over U.S. Treasuries.

The new notes were offered concurrently with a tender offer for $26,013,604,000 of old notes, of which $2,671,591,000 were accepted for purchase.

The joint bookrunning managers for the offer are BBVA Securities Inc., Goldman Sachs & Co. LLC and Mizuho Securities USA LLC.

China taps euro market

China priced €4 billion of senior notes (expected rating: A1) due in five, 10 and 15 years.

Pricing of the Regulation S notes came tight to initial talk.

The €750 million 0% five-year notes priced at 100.763 to yield negative 0.152%, or a spread of mid-swaps plus 30 bps. That pricing was tight to initial talk in the area of mid-swaps plus 45 bps.

The €2 billion ¼% 10-year bonds priced at 99.332 to yield 0.318%, or a spread of mid-swaps plus 55 bps. That pricing was tight to initial talk in the area of mid-swaps plus 70 bps.

The €1.25 billion of 5/8% 15-year notes priced at 99.445 to yield 0.664%, or a spread of mid-swaps over 70 bps. That pricing was tight to initial talk in the area of mid-swaps plus 90 bps.

Joint lead managers and joint bookrunners were Bank of China, Bank of Communications, China International Capital Corp., BofA Securities, Credit Agricole CIB, Deutsche Bank, Goldman Sachs (Asia) LLC, HSBC, JPMorgan, Societe Generale, Standard Chartered Bank and UBS.

Proceeds will be used for general government purposes.

VEON prices single tranche

The telecommunications company, with interests in the emerging markets, priced $1.25 billion of 3 3/8% senior notes due 2027 on Wednesday. The proceeds from the Rule 144A and Regulation S notes will be used to refinance debt and for general corporate purposes.

Amsterdam-based VEON Ltd. provides mobile and fixed-line telecommunications services through its subsidiaries in emerging markets.

Uzbek dollar and som deal

Uzbekistan priced UZS 2 trillion ($192.5 million equivalent) of three-year notes and $555 million of 10-year notes (BB-/BB-), according to pricing term sheets on Friday.

The UZS 2 trillion tranche of 14½% notes due Nov. 25, 2023 priced at par.

The $555 million tranche of 3.7% notes due Nov. 25, 2030 also priced at par and will yield 285 bps over U.S. Treasuries.

The Rule 144A and Regulation S notes were sold via Citigroup Global Markets Ltd., GPB-Financial Services Ltd., J.P. Morgan Securities plc, Societe Generale and VTB Capital plc as joint lead managers and joint bookrunners.

Suzano adds $500 million

Suzano priced an add-on of $500 million to its $750 million of 3¾% senior notes due Jan. 15, 2031 through Austrian subsidiary Suzano Austria, according to multiple filings with the Securities and Exchange Commission.

The notes have an interest step-up of 25 bps to 4% on July 16, 2026 unless sustainability performance targets are met in 2025.

Prior to Oct. 15, 2030, the notes include a call option with a make-whole premium of Treasuries plus 50 bps. After this date, they may be called for par plus accrued interest.

The reopening price was 105.51, plus accrued interest from Sept. 20 up to but excluding the settlement date, which is expected to be Nov. 19. The yield is 3.1%.

Proceeds will be used for repaying debt and rebuilding the cash position over debts maturing during the next periods as determined by the company’s debt management strategy.

Suzano Austria is a Vienna-based subsidiary of Suzano. The pulp and paper company is based in Sao Paulo.

China companies price

China’s Yili Holding Investment Ltd. has priced $500 million of 1 5/8% bonds due 2025, guaranteed by Inner Mongolia Yili Industrial Group Co. Ltd. The Chinese dairy company tapped Citigroup, HSBC and ICBC International as joint global coordinators, joint lead managers and joint bookrunners on the deal

Barclays, CLSA, Credit Suisse, Huatai International and Shanghai Pudong Development Bank Hong Kong Branch acted as joint lead managers and joint bookrunners.

Proceeds will be used for refinancing and general corporate purposes, according to Moody’s Investors Service.

Yili is a Hohhot, China, dairy producer.

Shandong Hi-Speed Group (Hong Kong) Co., Ltd., the Hong Kong subsidiary of China Shandong Hi-Speed Financial Group Ltd., has priced $400 million 2.437% bonds due 2023.

China Shandong Hi-Speed is an investment holding company based in Hong Kong.

China lender brings perpetuals

Bank of Communications Co., Ltd. sold $2.8 billion undated capital bonds (//BB+), according to a market notice.

The initial distribution rate is 3.8%. The distribution rate on the Regulation S issue will be reset every five years.

The issuer may redeem all of some of the bonds on the fifth anniversary and each distribution payment date after that.

Forward calendar offerings

Dubai Aerospace Enterprise (DAE) Ltd. plans to price a benchmark offering of dollar-denominated securities with a dissolution date of Feb. 15, 2026. The securities will be issued through DAE Sukuk (DIFC) Ltd.

Ayala Corp. subsidiary AC Energy, Inc. began a series of fixed-income investor calls on Nov. 18 to market dollar-denominated senior green fixed-for-life (non-deferrable) perpetual notes, according to a 17-C filing with the Philippine Securities and Exchange Commission.

The perpetual notes will be issued by AC Energy’s wholly owned subsidiary, AC Energy Finance International Ltd., and guaranteed by AC Energy.

The notes will be issued as a drawdown from the company’s recently updated $2 billion medium-term note program.

Ayala is a Makati City, Philippines-based conglomerate.

CTP BV plans to price an offering of euro-denominated three-year notes, according to a London Stock Exchange pre-stabilization notice on Friday.

The joint bookrunners of the Regulation S notes are Morgan Stanley & Co. International plc and Goldman Sachs International.

The logistics property company is the largest in the Central and Eastern European sector.

The Republic of Serbia had selected bookrunners and scheduled a global investor call regarding a proposed U.S. dollar-denominated offering of 10-year notes.

A Rule 144A and Regulation S deal, under the sovereign’s newly-established global medium term note program, will follow subject to market conditions.

The proceeds are earmarked to fund a concurrent tender offer of the sovereign’s 7¼% notes due 2021, of which $1.6 billion is currently outstanding. Any remaining proceeds will be used to fund a budget deficit.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.