“Recently, spreads have widened too
MUCH vûSAIDûAû3HINHANûOFlCIALûh7EûDIDNTû
WANTûTOûDOûOURûlRSTûDEALûATûSUCHûAûWIDEûLEVELû
We may consider coming back in October or
November if levels become more reasonable.”
Shinhan had mandated Bank of America
Merrill Lynch, Credit Suisse, HSBC, JP Morgan
and Mizuho Securitiesû)TûWENTûONûlXEDûINCOMEû
investor meetings in Asia and Europe last
month.
EUROPE/AFRICA
RUSSIA
CBOM DISHES UP TENDER OFFERCREDIT BANK OF MOSCOW has announced a new
tender offer, targeting subordinated bonds a
month after completing a buy back exercise
of two of its senior notes.
The lender has offered to purchase up to
US$100m across its US$600m 7.50% due
October 2027 new-style Tier 2s, which are
callable in October 2022; and its US$700m
8.875% perpetual AT1 notes, which are
callable in November 2022.
The offer is being made subject to an issue
of a rouble-denominated subordinated note.
“It’s a good opportunity to decrease the
cost of capital and optimise the capital
structure,” said a banker familiar with the
matter.
The October 2027s are bid at 85.377,
according to Tradeweb, and the perps at
85.457.
ING analysts believe that weakness in the
bank’s dollar bonds could have been
triggered by the overestimation of negative
actions against Russian corporates following
sanctions imposed on Rusal. They have an
upbeat view on the bond prices.
“In our view, this is a rather good chance
for the bank and a good signal for investors,
but we would recommend not to participate
in the tender offer as we consider the bank’s
CREDITûPROlLEûASûSTRONG ûWHICHûISûSUPPORTEDû
by its own dynamic business, good region
presence, client base, healthy growth and
close relations with Rosneft,” said ING
analysts.
“The bank survived during last year’s
banking crisis and maintained its client base
ANDûlNANCIALûSTABILITYv
The early tender premium on both notes
is US$30 per US$1,000 in principal. The early
tender deadline is July 27, with the offer
expiring on August 10.
Societe Generale and Sova Capital are the
dealer managers.
In last month’s transaction, the Russian
lender opened a buyback process offering to
purchase up to US$150m across its US$500m
5.875% 2021s and US$500m 5.55% 2023s.
In the end, just under US$13m of the
2021s and a touch over US$43m of the 2023s
were accepted.SOUTH AFRICA
SIBANYE TIES UP STREAMING
ARRANGEMENT TO CUT LEVERAGEWith the bond markets still too volatile for
most, would-be issuers are looking at other
ways of raising capital.
One such example is South Africa’s
SIBANYE-STILLWATER. The gold mining
company has previously issued bonds and
raised debt through the loan market too.
.OW ûINûWHATûISûCONSIDEREDûTOûTHEûlRSTûOFû
its kind in the CEEMEA region, it has
entered into an agreement with a
counterparty for upfront cash in exchange
for delivery of precious metals.
Sibanye will receive US$500m through a
streaming agreement with WheatonInternational, which claims to be the
world’s largest streaming company.
In return, Sibanye will deliver a
percentage of gold and palladium produced
from its US operations.
The deal will immediately reduce Sibanye-
Stillwater’s leverage - decreasing net
debt-to-adjusted Ebitda by between 0.6x and
0.7%. It will also take pressure off Sibanye’s
leverage ratios as agreed within its covenant
packages.
In addition, the streaming agreement is a
40-year arrangement with no repayment of
any of the advance amount under any
circumstances and no minimum delivery
obligations.
“There’s no maturity or principle; you pay
OFFûTHEûINITIALû53MûlNANCINGûWITHû
future delivery of product from the mine,”
said a source close to the deal.
The cost is also currently more
competitive than what’s available in the
international capital markets. Sibanye’s
2025s, for example, are trading at a yield
north of 8.50%, while the forward curves on
gold and palladium are both well inside that
level despite being 40-year money.
But clearly there’s no cap on the upside if
prices of the commodities rise by more than
the forward curve currently predict.
Another advantage of the arrangement is
that Moody’s doesn’t treat it as debt, while
S&P also gives it favourable treatment
compared with regular debt.
Streaming arrangements are common for
commodity based companies in North
America in particular, while in Europe
Glencore has also undertaken similar
lNANCINGûFORûMINEûDEVELOPMENTMIDDLE EAST
SAUDI ARABIA
SAUDI ELECTRICITY IN TALKS FOR BONDState-controlled utility SAUDI ELECTRICITY
COMPANY has recently discussed with a group
of international banks its plan to issue a US
dollar-denominated bond, sources familiar
with the matter told Reuters.
4HEûCOMPANYûISûLOOKINGûTOûRElNANCEûAû
US$2.6bn bridge syndicated loan it raised in
January and was aiming to issue the debt
securities already this month, depending on
market conditions.
Saudi Electricity, which did not
immediately respond to requests for
comment, raised the bridge loan for general
corporate purposes and to back its capital
expenditure programme, it said in January.ALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Europe/Africa
Managing No of Total Share
bank or group issues US$(m) (%)
1 Citigroup 28 9,272.36 14.5
2 JP Morgan 27 6,676.19 10.5
3 Deutsche Bank 16 5,703.42 8.9
4 VTB Capital 11 5,157.69 8.1
5 HSBC 15 4,157.98 6.5
6 Standard Chartered 8 3,504.97 5.5
7 BNP Paribas 14 3,102.34 4.9
8 Goldman Sachs 7 2,709.87 4.2
9 SG 13 2,578.20 4.0
10 UniCredit 10 1,632.86 2.6
Total 64 63,777.57
Excluding equity-related debt.
Source: Thomson Reuters SDC code: L2
ALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Middle East
Managing No of Total Share
bank or group issues US$(m) (%)
1 Standard Chartered 32 8,241.50 13.7
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 Commercial 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 67 59,974.09
Excluding equity-related debt.
Source: Thomson Reuters SDC code: L5