4HEûONLYûOTHERû%ASTERNû%UROPEANû
CORPORATEûTOûPRICEûAûDEALûSINCEûEARLYû-AYûWASû
"ULGARIANûSTATE
OWNEDûUTILITYû"%(û"A""
û
WHICHûPRINTEDûAûõMûûSEVEN
YEARû
NOTEûATûBPûOVERûMID
SWAPSûORûYIELDûOFû
ûONû*UNEû
BNP Paribas, JP Morgan and SEB were the
LEADSûONûTHEû,IETUVOSû%NERGIJAûDEAL
MIDDLE EAST
IRAQ
GULF KEYSTONE COMPLETES
US$100m BOND
GULF KEYSTONEûHASûPRIVATELYûPLACEDûAû53Mû
ûSENIORûUNSECUREDûlVE
YEARûBONDûISSUE
4HEûPROCEEDSûWILLûBEûUSEDûTOûRElNANCEûALLû
OFûTHEûOILûPRODUCERSûEXISTINGû53Mû
guaranteed notes due 2021.
“Following our recent announcement of
the resumption of investments at the
Shaikan Field to increase production to
ûBOPD ûANûINCREASEûBYûABOUTûû
COMPAREDûTOûCURRENTûLEVELS ûTHISûRElNANCINGû
RESETSûTHEûCOMPANYSûCAPITALûSTRUCTUREûTHATû
was put in place in conjunction with the
RESTRUCTURINGûINû vûSAIDû*ONû&ERRIER û'ULFû
+EYSTONESû#%/
)Nû û'ULFû+EYSTONE ûCRIPPLEDûBYûLOWûOILû
PRICESûANDûNON
PAYMENTSûFROMû)RAQIû+URDISTAN û
announced that its bondholders had agreed to
SWAPû53MûOFûDEBTûFORûEQUITY
Pareto Securities was sole manager.
UAE
ETIHAD-LINKED BONDS FACE
RESTRUCTURING AMID ABU DHABI SILENCE
4HEûISSUERûOFû53MûINûBONDSûDIRECTLYû
linked to ETIHAD AIRWAYS is looking at
restructuring options as Abu Dhabi, which
owns the carrier, has not intervened to
avoid a default, reports Reuters.
An Amsterdam-based special purpose
VEHICLEûCALLEDû306û%QUITYû!LLIANCEû0ARTNERSû
%!0 ûISSUEDûAû53MûBONDûINûûANDû
53MûBONDûINûûFORû%TIHADûANDûOTHERû
AIRLINESûITûPARTIALLYûOWNEDûATûTHEûTIME û
including Alitalia and Air Berlin.
The bonds have been trading at a discount
OFûOVERûûPOINTSûSINCEûLASTûYEAR ûWHENû
Alitalia entered special administration and
!IRû"ERLINûlLEDûFORûBANKRUPTCY ûBUTûTHEûNOTESû
KEPTûAmOATûBECAUSEûOFûMARKETûEXPECTATIONSû
OFûlNANCIALûBACKINGûBYû%TIHAD ûTHEûBORROWERû
of reference under the special purpose
VEHICLE ûORûBYûOTHERû!BUû$HABIûENTITIES
%TIHADûSPENTûBILLIONSûOFûDOLLARSûONûAIRLINEû
acquisitions that failed to deliver expected
returns. The state-owned airline once owned
MINORITYûSTAKESûINûASûMANYûASûEIGHTûOTHERûCARRIERS û
ANDûATûTHEûTIMEûOFûTHEûBONDûISSUEDûTHROUGHû%!0 û
THEûNOTESûWEREûSEENûASûSTRENGTHENINGû%TIHADSû
partnerships with the other airlines.
The carrier, which last month reported a
53BNûANNUALûLOSS ûHASûBEENûOVERHAULINGû
its business since 2016, replacing its top
EXECUTIVE ûDROPPINGûUNPROlTABLEûROUTESûANDû
SHRINKINGûITSûmEET
%TIHAD ûWHICHûDECLINEDûTOûCOMMENT ûISû
NOTûLEGALLYûOBLIGEDûTOûBACKûTHEûBONDSûASûTHEYû
have no cross-default provision, but with
MOREûTHANû53MûOFû%!0ûPAPERûHELDûBYû
5NITEDû!RABû%MIRATESûINVESTORS ûSOMEû
bondholders assumed Abu Dhabi would
SUPPORTûTHEûNOTESûDESPITEûTHEûINSOLVENCYûOFû
THEûTWOû%UROPEANûAIRLINES
,ATEûLASTûWEEKû%!û0ARTNERSû ûTHEûISSUERûOFû
the bonds due in 2021, announced on the
Irish stock exchange that an attempt to
auction for cash the defaulted obligations of
Alitalia and Air Berlin, called a
hREMARKETINGvûEXERCISE ûHADûFAILEDûASûTHEûBIDû
THATûWASûPUTûFORWARDûWASûINSUFlCIENTûTOû
redeem the notes.
It said it is considering restructuring
options including selling the defaulted
obligations of Alitalia and Air Berlin and
using the proceeds to redeem the notes at
discount, or selling both the defaulted debt
and the non-defaulted part of the bonds and
using the proceeds to redeem all of the
outstanding paper.
!LLûTHEûOPTIONSûAREûSUBJECTûTOûBONDHOLDERSû
approval.
Some creditors believe some sort of
intervention is still possible. “In excess of
ûOFûTHEûBONDûISûHELDûBYû!BUû$HABIûBASEDû
investors, whose entire participation in this
COMPLEXûDEALûHINGEDûUPONû%TIHADSû
SUPPORT vûSAIDûONEûCREDITOR
“It would be more advantageous for them
if noteholders voted to collapse theSTRUCTUREû)TûTAKESûONEûVERYûHIGHûPROlLEûANDû
HIGHLYûCONTROVERSIALûBONDûOUTûOFûTHEûPUBLICû
domain, allowing them to restructure the
UNDERLYINGûAIRLINESûWITHûLESSûSCRUTINYv
&OLLOWINGûTHEûISSUERSûSTATEMENT ûTHEû
bonds lost more than 2 points, which is a
SIGNIlCANTûTHOUGHûNOTûDRAMATICûDROP
h)ûDONTûTHINKûITûGOTûANYûBETTER ûBUTû)ûDONTû
THINKûTHEREûISûANYûLESSûCHANCEûOFûANû
INTERVENTION vûANOTHERûCREDITORûSAID
Also, given the composite structure of the
notes, the worst-case scenario would still be
lNANCIALLYûLIMITED ûHEûADDEDAMERICAS
BRAZIL
BRF BONDS ENJOY LIFT ON NEW
CEO’S REORG PLANS"RAZILIANûFOODûCOMPANYûBRF has been an
OUTPERFORMERûINûWHATûHASûLARGELYûBEENûAû
DOWNûMARKETûFORû%-ûASSETSûASûTHEûNEWûCHIEFû
EXECUTIVEûLOOKSûTOûTURNûTHEûCOMPANYûAROUNDû
AFTERûAûROUGHûYEAR
Its 2024s have jumped about two points,
according to Thomson Reuters data, since
FORMERû0ETROBRASû#%/û0EDROû0ARENTEûTOOKû
the reins in mid-June.
4HEûCOMPANYûISûCARRYINGûOUTûAûRESTRUCTURINGû
plan as it seeks to improve its capital structure
ANDûCUTûLEVERAGE ûINûPARTûBYûSHEDDINGûASSETSûINû
%UROPE û!RGENTINAûANDû4HAILAND
Parente has also sat down with local
"RAZILIANûBANKSûINûANûEFFORTûTOûLENGTHENûLOANû
maturities, according to local press reports.
,ASTûWEEK ûITûSAIDûITûHADûTAKENûOUTûAû
2BNû53M ûEXPORTûCREDITûNOTEû
through Banco Bradesco as part of the
LIABILITYûMANAGEMENTûOPERATION
/NCEûCONSIDEREDûAûHIGHûQUALITYûCREDIT û"2&û
has suffered a series of blows after a period
of aggressive expansion.
,ASTûYEAR ûTHEûCOMPANYûALSOûCAMEûUNDERû
investigation for alleged bribes to inspectors to
OVERLOOKûUNSANITARYûPRACTICESûANDûULTIMATELYûHADû
THEû%UROPEANû5NIONûBANNINGûITSûMEATûEXPORTS
.ETûLEVERAGEûHITûXûINûûASûHIGHERû
working capital needs and a R$1.2bn
disbursement for an acquisition turned free
CASHmOWûNEGATIVE
Against that backdrop, some are doubtful
that the bonds have much upside left, and
indeed prices were showing some signs of
WEAKNESSûBYûTHEûWEEKSûEND
h4HEREûISûAûLOTûOFûUNCERTAINTYûABOUTûWHATû
THEYûCANûSELLûANDûWHATûTHISûREORGANISATIONû
WILLûLOOKûLIKE vûSAIDûONEûBANKERûh4HEûBONDSû
HAVEûRALLIEDûAûLOTûCONSIDERINGûTHEûFACTûTHEYû
HAVENTûDONEûMUCHvALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018–30/6/2018
Middle East
Managing No of Total Share
bank or group issues US$(m) (%)
1 Standard Chartered 31 8,228.76 13.8
2 Citigroup 15 5,800.56 9.7
3 HSBC 24 5,610.43 9.4
4 Deutsche Bank 7 4,152.37 6.9
5 JP Morgan 8 3,544.32 5.9
6 Barclays 9 2,772.01 4.6
7 Credit Suisse 7 2,571.38 4.3
8 Al Khaliji Comm Bank 2 2,082.76 3.5
9 Goldman Sachs 3 1,930.39 3.2
10 Credit Agricole 9 1,925.20 3.2
Total 65 59,803.82
Excluding equity-related debt.
Source: Thomson Reuters SDC code: L5