Emerging Markets: Market players eye China Evergrande; CBOM to price; CTP sells €1 billion

By Rebecca Melvin

Concord, N.H., Sept. 24 – The emerging markets primary market was more subdued this past week than last – as was the debt market in general in terms of issuance – amid headlines swirling around the heavily debt burdened China Evergrande Group and its prospects going forward given a drop in sales.

A $83.5 million Evergrande coupon due on Thursday for a bond with $2.02 billion face value came and went without payment, according to market sources, starting the clock on a 30-day grace period before bondholders can call a default.

Last week the Guangzhou, China-based real estate development company announced that it had hired financial advisers amid expectation of a continuing decline in contract sales in September.

But there were pockets of emerging markets activity, with issuers coming to market and more in the pipeline. Credit Bank of Moscow selected banks and scheduled fixed-income investor calls regarding an offering of dollar-denominated benchmark of subordinated additional tier 1 perpetual notes (expected rating: //B-), according to a syndicate source.

A series of individual investor calls commenced on Thursday, and a global investor call was being held on Friday for the notes, which are non-callable for 5.5 years.

Citigroup, ING, J.P. Morgan, Societe Generale and Sova Capital are joint global coordinators and joint bookrunners along with Emirates NBD Capital, Gazprombank and Renaissance Capital as joint bookrunners for the Rule 144A and Regulation S deal.

Credit Bank of Moscow is a full-service commercial and consumer bank.

Emerging markets-focused CTP NV announced on Tuesday that it sold €1 billion of green senior notes with five-year and 10-year maturities. The €500 million five-year tranche priced at 99.926, and the €500 million 10-year tranche priced at 99.393.

J.P. Morgan AG, Citi, Erste Group, Goldman Sachs Bank Europe SE, ING, KBC and Morgan Stanley were managers for the Regulation S deal, which is expected to be listed for trade on Euronext Dublin.

CTP is a real estate company that owns and develops business parks in Central and Eastern Europe. The company has offices in Prague and Utrecht, The Netherlands.

And on Thursday, Sao Paulo-based carrier GOL Linhas Aereas Inteligentes SA priced another reopening of its 8% senior secured notes (B2) due June 30, 2026.

The additional $150 million of notes will be consolidated and form a single series with the $500 million of notes previously issued: $200 million issued on Dec. 23, 2020 and $300 million issued on May 11.

The new notes priced at 100.75 for a 7.728% yield.

Interest will be paid from June 30 to the date the notes are delivered, expected to be Sept. 28.

The notes will be callable by GOL on and after Dec. 24, 2022.

Security is in the form of substantially all of GOL Linhas’ intellectual property, including patents, trademarks, brand names, domain names and aircraft spare parts located in Brazil.

Proceeds will go toward general corporate purposes, including opportunistic aircraft acquisitions and working capital.

On Monday, Poland’s mBank SA announced that it sold €500 million six-year fixed-to-floating rate green notes (//BBB-), with an initial 0.966% coupon. The notes can be redeemed Sept. 21, 2026 and have a reset margin over three-month Euribor.

Commerzbank, Erste Group Bank, UBS Europe and UniCredit Bank were managers for the insurance company’s deal.

Also on Monday, Electricidad Firme de Mexico Holdings, SA de CV, a subsidiary of Cometa Energia SA de CV, priced $350 million of 4.9% senior secured notes (Ba2/BB) due Nov. 20, 2026, according to a listing notice.

J.P. Morgan Securities LLC, Mizuho Securities USA LLC and Scotia Capital (USA) Inc. are the joint lead managers and joint bookrunners for the Rule 144A, Regulation S and Regulation D offering.

Proceeds, according to Moody’s Investors Service, will be used to refinance a bridge loan and for other general corporate purposes

The issuer is the holding company for Cometa, an owner and operator of gas power plans and compression stations.

Meanwhile, details emerged on JSW Steel Ltd.’s $1 billion of notes (Ba2//BB-) in two tranches due 2027 and 2032 that priced last week, according to multiple announcements.

The notes were issued on Thursday.

The Mumbai-based steelmaker company priced $500 million of 3.95% notes due 2027 and a tranche of $500 million 5.05% sustainability-linked notes due 2032.

Initial talk had the 2027 notes with a 4 3/8% coupon and the 2032 notes at 5½%.

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