In the latter half of June, BEH had just
crept over the line with a €400m seven-year
priced at par to yield 3.50%.
A reverse enquiry prompted state-owned
"%(ûTOûREOPENûTHEû*UNEûSûATûAûPARûlXEDû
price. The notes were bid just below par,
according to Thomson Reuters data.
!NûINTERNATIONALûlNANCIALûINSTITUTIONû
gained board approval to purchase up to 20%
of the aggregate principal amount -
presumably the same development bank
that had an anchor order of up to 20% on the
original offering.
The issuer is rated Ba1 by Moody’s and BB
by Fitch.
Citigroup was sole bookrunner and lead.
TURKEY
CONFIDENCE IN COUNTRY TESTED
TO THE LIMIT
)TûWASûANOTHERûDIFlCULTûWEEKûFORûTURKEY as
the sovereign’s bonds were hit by a
whirlwind of policymaking decisions which
BAFmEDûECONOMISTS ûANDûWILDûTALKûOFû
sanctions from US President Donald Trump.
Turkey’s central bank met on Tuesday for
THEûlRSTûTIMEûSINCEûTHEûCOUNTRYSû
presidential election and changes to the
administration. All eyes were on how much
it would raise policy rates by, with many
analysts expecting at least a 100bp hike
from the level of 17.75%.
However, some analysts suspected the
opposite might happen. “We think the
central bank will hold rates steady on 24
July. Erdogan has tightened his grip on the
central bank, and higher interest rates do
NOTûlTûWITHû4URKEYSûGROWTHûSTRATEGY vûSAIDû
ABN AMRO strategists in a note on Monday.
And so it proved. With President
Erdogan’s power assured, the country has
returned to where policy was before the
election was called, focusing on growth
RATHERûTHANûTAMINGûINmATION ûWHICHûATû
15.39% in June (on an annualised basis) is at
its highest in 14 years, according to Reuters.
But interest rates in Turkey have a much
more powerful role than a pure economic
lever. And in that sense the central bank did
nothing to assuage investor worries about
its independence and the overall direction
of policymaking, when it decided to leave its
policy rate unchanged.
Naturally, after the no-change
announcement, Turkish assets blew out. In
the bond market, for example, the yield on
the February 2028s gapped out by 30bp to
7.22% before recovering some 10bp or so to
quoted at 7.12%.
The lira, meanwhile, was threatening to
hit 5 against the dollar as it went from 4.73
at Tuesday’s London open to 4.93 after the
central bank’s announcement. It staged a bit
of recovery to 4.86 by the end of the week
though headline risks remain acute.
This was brought to the fore by a tweet on
Thursday by Trump, who threatened to hit
Turkey with sanctions unless it freed an
American pastor.
Andrew Brunson is on trial for terrorism
charges, which he has denied. A court
ordered last week that he be moved to house
arrest after 21 months in detention.
“The United States will impose large
sanctions on Turkey for their long time
detainment of Pastor Andrew Brunson, a
great Christian, family man and wonderful
human being,” Trump tweeted.
Trump’s statement prompted an angry
response from Ankara, escalating tensions
between the two Nato allies.REGIONAL
UNITED GROUP SEEKS CONSENTUNITED GROUP has announced a consent
solicitation relating to its outstanding
€575m of 4.375% senior secured notes due
July 2022.
The consent is to amend the special
mandatory redemption provisions in
connection with the completion of the
proposed acquisition of NOVA Croatia and
POP Slovenia, from CME Media Enterprises
BV.
The Croatian transaction is scheduled to
close on July 31, and the Slovenian
transaction is subject to antitrust and
regulatory approvals.
The consent fee is 0.125%. The consent
requires the receipt of valid and unrevoked
consents of holders representing 90% in
aggregate principal amount of the notes
outstanding.
The solicitation agents are Credit Suisse and
KKR.MIDDLE EAST
SAUDI ARABIA
SABIC MANDATES BANKS FOR
INTERNATIONAL BONDSaudi Arabian conglomerate SABIC has hired
banks for an international bond offering,
according to sources.
The timing and nature of the trade
remain to be seen, given news that state-
owned oil company Saudi Aramco is seeking
to a buy a controlling stake in Sabic.Aramco could possibly take the entire 70%
holding owned by Saudi Arabia’s sovereign
wealth fund, Public Investment Fund (see
Top News).
Sabic, rated A1/A-/A+, has a US$1bn bond
maturing this October, which was sold in
2013 through Sabic Capital. The same unit
raised a US$1bn term loan in 2013, which
fell due in July.AMERICAS
ARUBA
ARUBA RETURNS TO DOLLAR MARKETARUBA raised US$125m last week through a
10-year bond, returning to the dollar market
after a long absence, but at a substantial
premium to the curve.
The deal, which was sold as a private
placement, was priced at par to yield 6.5%,
or a little less than 200bp over where the
SOVEREIGNSûlVE
YEARûBONDûWASûTRADING
The yield was also higher than the
average borrowing cost of 4.21% incurred
LASTûYEARûWHENûTHEûSOVEREIGNûlNANCEDûITSELFû
almost exclusively in the domestic market,
according to Fitch.
At 6.5% the deal was heard attracting
attention, at least among local accounts who
favoured bonds from Aruba, which is a
constituent country of the Netherlands.
“Two of my desks wanted to participate,”
said a Caribbean investment banker. “It is a
good sovereign. They have always paid back
their debt.”
Fitch agrees, noting that Aruba has an
“impeccable repayment record” with the
Netherlands giving it access to development
funds and emergency assistance in the event
OFûlNANCIALûSTRESSEMERGING MARKETS AMERICASALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Europe/Africa
Managing No of Total Share
bank or group issues US$(m) (%)
1 Citigroup 30 9,612.07 14.9
2 JP Morgan 27 6,676.19 10.3
3 Deutsche Bank 16 5,703.42 8.8
4 VTB Capital 11 5,157.69 8.0
5 HSBC 15 4,157.98 6.4
6 Standard Chartered 8 3,504.97 5.4
7 BNP Paribas 15 3,266.79 5.1
8 Goldman Sachs 7 2,709.87 4.2
9 SG 13 2,578.20 4.0
10 UniCredit 10 1,632.86 2.5
Total 68 64,556.84
Excluding equity-related debt.
Source: Thomson Reuters SDC code: L2