BOC Macau raises funds for virus response
Social bonds issued to mitigate the impact of the epidemic
BANK OF CHINA, Macau branch, has issued
US$638m-equivalent of senior social bonds
to fund loans to small and medium-sized
companies impacted by the coronavirus
outbreak in Macau.
A HK$4bn (US$513m) two-year tranche was
priced at par to yield 1.95%, inside initial
guidance of the 2.25% area. A MOP$1bn
(US$125m) two-year pataca tranche was priced
at 1.90% versus initial 2.20% area guidance.
The Reg S notes, issued off the lender’s
MTN programme, have expected ratings of
A1/A/A, on par with the issuer.
4HISûMARKSûTHEûlRSTûSOCIALûBONDûISSUEûINû
the international market with an explicit
Covid-19 theme.
On February 11, Agricultural Development
Bank of China issued Rmb1.5bn (US$214m)
OFû$IMû3UMûBONDSûTOûlNANCEûITSûRURALû
revitalisation strategy as well as to help fund
#HINASûlGHTûAGAINSTûTHEûOUTBREAK ûBUTûTHESEû
WEREûNOTûCERTIlEDûASûSOCIALûBONDSProceeds from the BOC bonds will be used to
provide affordable loans to micro, small and
medium-sized enterprises in Macau as they
grapple with the consequences of the virus.
The bank has drawn up a list of eligible
projects with a total value of MOP$5.16bn or
so in sectors including construction and
public works, services, wholesale and retail,
manufacturing, catering, transportation,
warehousing and communications.
According to media reports, there have
BEENûûCONlRMEDûCASESûOFûCORONAVIRUSû
infection in Macau as of February 28. Gaming
has been allowed to resume after the territory
closed down casinos as a precautionary
MEASUREûDURINGûTHEûlRSTûHALFûOFû&EBRUARY ûBUTû
the city is only receiving around 2,000 daily
visitors, a drop of around 98% year on year,
ACCORDINGûTOûOFlCIALûlGURES
Sean McNelis, global co-head of debt capital
markets at HSBC, which was a lead manager
and bookrunner on the Hong Kong dollartranche, said the deal showed that public
markets have a role to play in supporting
SMEs affected by the Covid-19 outbreak.
“The strength of the order book shows
there is clearly investor appetite to get behind
this initiative, which further broadens the
range of alleviation measures, from both
public agencies and private institutions.”
4HEû(ONGû+ONGûDOLLARûTRANCHEûDREWûlNALû
orders of over HK$7.1bn from more than 20
accounts, including HK$3.35bn from the leads.
Statistics for the pataca tranche were not
disclosed at the time of writing.
BOC, Agricultural Bank of China Hong Kong
branch, Citigroup, Commonwealth Bank of Australia,
Credit Agricole, DBS Bank, HSBC, ICBC (Asia), JP
Morgan and Scotiabank were lead managers and
bookrunners for the Hong Kong dollar tranche.
For the pataca tranche, BOC, CCB Macau branch,
China Guangfa Bank Macau branch, Luso Bank and Tai
Fung Bank were lead managers and bookrunners.
Carol Chan FRONT STORY RUSSIARussians embrace March window
Month to open with issuers braced to flood in
Russian issuers are set to get the March
CEEMEA primary off to a blistering start,
markets permitting, with a number of
names waiting in the wings.
With rates at all-time lows because of the
spread of the coronavirus, it’s a potentially
attractive entry point for yield-sensitive
issuers, as Russian corporates tend to be.
But equally, the big sell-off in risk assets
over the past week make it hard to know how
far issuers can push on pricing and what size
of premium may be required. “Even Russian
investors have price breaks,” said one banker.
Russian Railways (Baa2/BBB-/BBB) is
mASHINGûITSû%3'ûCREDENTIALS ûAPPOINTINGû
banks for a green eight-year Eurorouble and
a green Swiss franc offering with an
intermediate maturity.
4HEûSTATE
OWNEDûCOMPANYûWASûTHEûlRSTû
Russian issuer to print a green note when it
sold a €500m May 2027 deal last year at
2.20% that is now bid at 1.01%.
Leads said that around 25% of those
BONDS ûWHICHûRECEIVEDûCERTIlCATIONûTOûTHEû
Climate Bonds Initiative Low Carbon LandTransport Standard, went to investors’ ESG
considerations.
As well as passengers, Russian Railways
transports freight, including coal, coke and oil
and petroleum products. In the 2019, for
example, coal accounted for 29% of its rail
freight volumes, and oil and oil products 18%.
Meetings for the Eurorouble begin in
Moscow and London on Monday, while the
roadshow for the Swiss franc deal took place
last week.
Fertiliser company EUROCHEM (Ba2/BB/BB-)
PLANSûTOûISSUEûAûlVEûTOûSEVEN
YEARû53ûDOLLARû
bond.
S&P put the company on a positive outlook
on Thursday, forecasting that the company
WILLûGENERATEûPOSITIVEûFREEûOPERATINGûCASHmOWû
of more than US$315m in 2020, and that its
credit metrics will strengthen.
h;4HEûPOSITIVEûOUTLOOK=ûREmECTSûOURûVIEWû
that the proposed issuance will strengthen
EuroChem’s liquidity and capital structure,”
S&P said.
EuroChem has a couple of small bond
maturities coming due. It has a US$124m3.80% note maturing in April and a US$128m
3.95% bond expiring in July next year.
Also within the corporate sector, steel
group NLMK has sent a request for proposals
to banks for an international bond,
according to a source.
NLMK (Baa2/BBB-/BBB) sold a US$500m
seven-year in May at 4.70%. The note is bid at
2.99%.
ING analysts said steelmaker EVRAZ could
be another name to watch this year after the
ISSUERûANNOUNCEDûITSûlNANCIALûRESULTS
“Evraz showed its ability to generate solid
FREEûCASHmOW ûKEEPûLEVERAGEûATûRELATIVELYû
stable low levels and maintain a comfortable
liquidity position,” they wrote.
“Given 2021 debt redemptions of US$1bn
we expect that company might tap
Eurobond markets in 2020.”
STATE TRANSPORT LEASING COMPANY (Ba1/BB/
BB+) is another looking to place a dollar bond.
The state-owned issuer is meeting
investors on Monday in London ahead of a
seven-year issue.
Robert HoggInternational Financing Review February 29 2020 45EMERGING MARKETS
China 46 Hong Kong 49 India 51 South Korea 51 Belarus 51 South Africa 52
Lebanon 52 Argentina 52 Chile 538 IFR Emerging 2322 p 45 - 54 .indd 45 28 / 02 / 2020 18 : 17 : 15