The sovereign priced a US$2bn 10-year
bond at par to yield 3%, tightening from
initial guidance of 3.3% area, and printing
inside its own curve.
That yield translated to 37.8bp over 10-
year Treasuries, not far away from the 25bp
spread that China achieved in its 10-year
trade in October. China is rated A1/A+/A+,
although it did not seek a rating for last
autumn’s issue.
That was much tighter than recent
sovereign issuer Mexico, rated slightly
higher at A3/BBB+/BBB+, managed to
achieve for its 10-year US dollar issue on
*ANUARYûû$ESPITEû-EXICOSûBETTERûRATINGS û
its notes priced at a yield of 3.802%,
equivalent to 135bp over Treasuries.
Nomura had put fair value for the
Philippine new issue at around 3.15%, based
on its 5.5% 2026 bond, which was quoted at
a mid Z-spread of 45bp, or 3.03%. That meant
that the Philippines printed well inside its
curve.
The sovereign simultaneously held a
switch tender for 14 of its outstanding dollar
bonds, with maturities between January
2019 and January 2037.
Of the new issue, US$1.25bn was allocated
to participants in the switch exercise and
US$750m was new money.
“The strong support that this 10-year
GLOBALûBONDûmOATûHASûRECEIVEDûINûTHEû
international capital markets is a testament
TOûTHEûDEEPENINGûINVESTORûCONlDENCEûINûTHEû
country’s newfound status under the
$UTERTEûPRESIDENCYûASûONEûOFûTHEûWORLDSû
FASTEST
GROWINGûECONOMIES vûSAIDû#ARLOSû'û
$OMINGUEZ ûTHEûCOUNTRYSûlNANCEûSECRETARY
He said the proceeds from the issue and
from the recent TRAIN law would help fund
$UTERTESû@"UILD û"UILD û"UILDûPROGRAMMEûTOû
modernise infrastructure and improve
competitiveness.
The TRAIN, or Tax Reform for
Acceleration and Inclusion, law was
implemented on January 1 and cut personal
income tax, while raising taxes on petrol,
cars and sugary drinks.
Citigroup and Standard Chartered were joint
global coordinators for the new bond
offering and dealer managers for the tender.
They were joined on the books by Credit
Suisse, Deutsche Bank, Morgan Stanley and UBS.
SINGAPORE
GATE COMPLETES RESTRUCTURINGSemiconductor assembly-and-test company
GLOBAL A&T ELECTRONICS said its restructuring
plan had gone into effect on approval from a
US court.
The restructuring will cut the company’s
debt to US$665m from US$1.12bn.
“The closing of our restructuring is the
culmination of hard work and strong
support from our equity sponsors and
noteholders, who have been constructive
partners throughout our restructuring
process,” said CEO W John Nelson.
The restructuring will also resolve all
litigation by bondholders. Some holders of
'ATESû53MûûSENIORûSECUREDûBONDSûDUEû
2019 issued in February 2013 had taken legal
action after the company later converted a
second lien loan into an additional US$502m
of the same series of notes.
'ATEûWILLûISSUEû53MûINûûSECUREDû
notes due 2022, up from 7.75% on its
previous one. The initial holders will receive
US$517.64m of new notes, plus US$8.89m in
cash, and the additional holders will receive
US$84.9m in notes and shares equivalent to
a 31% stake in Singapore-headquartered
54!#û(OLDINGS ûTHEûPARENTûOFû'ATE ûASûPARTû
of a corporate reorganisation.
(OLDERSûOFûTHEûINITIALûNOTESûTHATûSUEDû'ATEû
over the conversion of the loan will receive
an additional US$11.11m of new secured
notes and US$1.11m in cash.SOUTH KOREA
KOOKMIN ROADSHOWS AUSSIE DEALKOOKMIN BANK (A1/A+/A) has mandated HSBC
to arrange a series of meetings with
Australian dollar investors in Australia and
Asia during the week beginning January 29.EUROPE/AFRICA
POLAND
PONDERING A GREEN RENEWALPOLANDûISûCONSIDERINGûISSUINGû'REENûBONDS û
THEûlNANCEûMINISTRYûSAIDûONû-ONDAY
The ministry said in e-mailed comments
TOû2EUTERSûTHATûTHEû'REENûBONDûSALEûWOULDû
be in euros. It said it may also issue a
benchmark bond, either in euros or more
likely in dollars, but gave no further details.
0OLANDûPRINTEDûTHEûlRSTû'REENûBONDûFROMû
a sovereign in the last weeks of 2016 though
the structure didn’t appear to offer any
DISCERNIBLEûPRICINGûBENElT
4HEûõMû$ECEMBERûS ûWHICHû
priced at 99.343, are bid at 101.418
according to Tradeweb.
The sovereign was last in the dollar market
in March 2016 when it sold US$1.75bn due
April 2026s at Treasuries plus 150bp. The
bonds are bid above par at 101.174.RUSSIA
PHOSAGRO SMASHES THROUGH FAIR
VALUEIt’s a new year but the same old story when
it comes to pricing dynamics for Russian
corporates in the international bond
markets.
Fertiliser company PHOSAGRO sold a
US$500m April 2023 note on Wednesday,
smashing through fair value. The bond priced
ATûAûYIELDûOFû ûINSIDEûTHEûlNALûGUIDANCEû
range of 4.125% area (plus or minus 12.5bp) as
the company took advantage of a book in
excess of US$2.4bn to tighten the screws.
The outcome was similar to that achieved
by numerous Russian companies in recent
times, whose deals have been largely
supported by local investors.
Allocation statistics show that in this
instance the vast majority of buyers were
accounts in the US, UK and Europe, which
got a combined 83%. Russian funds took 7%
and Swiss investors 9%. Asset managers
accounted for 83% of the buyer base.
PhosAgro (Ba1/BBB-/BB+) began marketing
the no-grow bond at 4.375% area. At that
level, bankers away from the deal reckoned
it was offering a 15bp-25bp new issue
premium based on the company’s
outstanding November 2021s.
4HEûWIDEûRANGEûWASûAûREmECTIONûOFûANû
illiquid curve and a lack of consensus about
WHATûTHEûSTEP
UPûFROMûTHREEûTOûlVEûYEARSûISû
worth.
One banker away from the deal, who
spotted the 2021s at a bid yield of 3.80%, or a
Z-spread of 145bp, reckoned IPTs were 20bp-
25bp back of fair value.
Another banker away, who saw the
outstanding at plus 143bp, said the curve
was worth 35bp, putting fair value at 178bp
over swaps. The spread at IPTs was about
plus 193bp, putting the concession at 15bp.EMERGING MARKETS EUROPE/AFRICAALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Europe/Africa
Managing No of Total Share
bank or group issues US$(m) (%)
1 Citigroup 5 1,620.76 26.8
2 HSBC 2 963.37 15.9
3 Deutsche Bank 2 860.13 14.2
4 BNP Paribas 2 459.76 7.6
5 Commerzbank 2 350.40 5.8
6 Goldman Sachs 1 300.63 5.0
=6 Nova Ljubljanska Banka 1 300.63 5.0
=6 Jefferies 1 300.63 5.0
9 Erste Group 1 197.39 3.3
10 UniCredit 2 99.77 1.6
Total 6 6,052.54
Excluding equity-related debt.
Source: Thomson Reuters SDC code: L2