20 International Financing Review September 8 2018“The economy of the entire country could
be strangled”
CLEARY GOTTLIEB’S LEE BUCHHEIT ON VENEZUELA, P17Capital markets week ahead:
PIF, Refinitiv, Meituan Dianping
BLURRED VISION Saudi Arabia’s Public
Investment Fund is set to sign off on a deal
to borrow US$11bn from more than a dozen
foreign banks. It’s the first time the
sovereign wealth fund has publicly
borrowed money, and comes as PIF looks at
alternative ways of raising cash after plans
to float oil producer Aramco were
indefinitely put on hold. The IPO was
supposed to raise US$100bn for the fund.
PIF plans to invest heavily in the Saudi
economy as part of Crown Prince Mohammed
bin Salman’s Vision 2030 programme, which
aims to wean the country off its reliance on oil
revenues. But the mothballed Aramco deal has
left it with a financial hole to fill. As well as
borrowing money, PIF is also selling a US$70bn
stake in petrochemical manufacturer Sabic to –
you couldn’t make it up – Aramco.A REFINED TASTE Banks begin marketing
US$5.5bn of bonds backing Blackstone’s
US$20bn purchase of a controlling stake in
Refinitiv, Thomson Reuters’ financial data
and technology business that includes IFR.
The deal is set to be a major test of appetite
among high-yield investors, given the highly
leveraged nature of the deal and aggressive
covenants. Refinitiv is expected to offer as
much as 9% to attract investors.JUST THE TICKET Meituan Dianping hopes to
shake off any negative sentiment towards
emerging markets when it goes public in
Hong Kong on Wednesday. The loss-making
Chinese e-commerce company, which runs a
range of online businesses from food
delivery to ticketing services, is hoping to
raise HK$34.6bn (US$4.4bn). It is the third
mega-IPO out of Hong Kong this year after
Xiaomi and China Tower.TURKISH DELIGHT Turkey’s central bank
board meets in Ankara on Thursday, amidpressure to hike rates substantially to stem a
financial crisis that has seen the lira halve in
value against the dollar over the last year.
The decision will have a key bearing on local
banks Akbank and Turk Eximbank, which
are locked in talks with foreign banks to
persuade them to extend loan facilities.NO VACANCIES Covivio Hotels hits the road
to market a €300m bond deal at a difficult
time for Europe’s real estate market.
Investor sentiment towards the asset class
has soured in recent months – only last
week, German’s ADO Properties pulled a
deal. That comes after an explosion in debt
and equity deals from European property
companies, which has allowed some to
expand their businesses exponentially.CELL, CELL, CELL Tencent-backed electric vehicle
maker Nio hopes to raise as much as US$1.3bn
from its New York IPO on Tuesday. That’s
significantly less than the US$1.8bn the loss-
making company had initially been targeting
when it first filed to go public last month.
Founded in 2014, Shanghai-based Nio is looking
to serve the premium EV market in which Tesla
operates, though at a much lower price point.START YOUR ENGINES Aston Martin Lagonda is
set to formally launch its £1bn-plus IPO as the
British carmaker goes public for the first time in
its 105-year-old history. The listing is expected to
be the first test of new rules encouraging
analysts at firms not connected to the IPO to
publish research. Given the high-profile name
and a division of opinion on its strategy, there is
potential for some contrary views.GUINEA PIG Papua New Guinea is expected
to make its debut in the US dollar bond
market – almost 20 years after it first held
roadshows before ditching plans. The Pacific
nation, which met with investors last week,
is said to be targeting a US$500m–$1bn
issue. PNG said the proposed bond offeringwould inject much-needed liquidity into its
economy, giving it diversification away from
expensive local borrowing.COOKING WITH GAS Vier Gas Transport,
Germany’s largest gas transmission system
operator, begins meeting investors from
Wednesday to market a €500m bond deal.
The roadshow starts in Amsterdam, before
moving on to Frankfurt and London. The
company hasn’t been seen in bond markets
for a few years, although it did refinance a
€600m revolving loan last year.LAST ORDERS EI Group, the UK pub operator
formerly known as Enterprise Inns, is
expected to launch a £150m bond deal
following a two-day roadshow marketing the
deal to investors. Proceeds will be used to pay
off – in full or in part – a £100m convertible
bond deal that it sold five years ago. The
company has spent the last few years selling
off properties to pay off a mammoth debt pile.BREAKING NEWS Tencent-backed Chinese news
aggregator Qutoutiao is targeting just over
US$130m from its Nasdaq IPO on Thursday,
substantially less than the US$300m it had
initially been targeting. Qutoutiao, which
means “fun headlines” in Chinese, allows users
to create customised feeds of articles and short
videos from third-party sources.FISHING OFFSHORE China Southern Power
Grid and China State Shipbuilding are
expected out with US dollar bonds. The
deals follow two big deals from Chinese
state-owned enterprises Sinopec and China
General Nuclear Power, the first offshore
SOE bonds for a while. While both deals
easily made it over the line, order books
failed to reach the dizzy oversubscription
levels of past years.LAST WEEK IN NUMBERS
US$2bn – Amount raised by oil producer
Eni, the first Italian foray into the US IG
market this year
7.25% – Coupon that Credit Suisse paid
on its AT1 last week, 25bp less than a
similar deal in July
39 years – Tenure of Citigroup EMEA
chief executive Jim Cowles, who is
retiring5 PM 2250 p15-24.indd 20 07/09/2018 18:36:14