S&P said that because Dubai’s population
growth had outpaced economic growth, its
GDP per person had declined to US$37,000
in 2018 from a peak of US$45,000 in 2013, a
sign of deterioration in the government’s
potential tax and funding base.
The agency predicted the drop would
continue over the next couple of years,
reaching US$36,000 in 2020.REGIONAL
APICORP BROADENS ITS HORIZONSMiddle East multilateral development bank
APICORP is extending its reach across the
Atlantic as it prepares the ground for its first
issue with 144A documentation.
The borrower is owned by the 10
members of the Organisation of Arab
Petroleum Exporting Countries. These
include Saudi Arabia and the UAE (which
along with Kuwait are its biggest
shareholders with a 17% stake each), as well
as Qatar, which owns 10%.
“They clearly have a following on the Islamic
side, but doing a 144A trade is a good way of
diversifying the investor base,” said a lead.
Apicorp’s three-day roadshow, which
finished on Friday, incorporated dates in
London, Boston and New York.
The development bank was last in the
dollar market in October with US$500m of
five-year sukuk. This time round it is
looking to place a conventional five-year
benchmark.
The move comes after Moody’s assigned a
provisional Aa3 rating to Apicorp’s MTN
programme in late August.
“It is very highly rated so will appeal to an
investor base looking for high quality,” said
the lead. “GCC in the past couple of months
has been an outperformer as a region,
particularly in high-quality names, and this
is a stable asset.”Apicorp’s US$500m 3.141% November
2022s are bid at 97.208 to yield 3.876%.
Credit Agricole, HSBC, JP Morgan and
Standard Chartered are lead managers and
bookrunners. Union National Bank is a co-
lead manager.AMERICAS
BRAZIL
INVEPAR MANDATESInfrastructure firm INVEPAR confirmed
reports that an international bond is one of
several options it is considering to manage
liabilities.
In a notice to the market, the company
said it had mandated Santander, Bradesco,
BTG Pactual, Banco do Brasil and Citigroup as
part of the operation.CARIBBEAN
DIGICEL BONDS KNOCKED BY
DOWNGRADESBonds issued by Caribbean and Central
American mobile phone provider DIGICEL
sank early last week after Moody’s and Fitch
put the credit into distressed territory.
Digicel, which has been a frequent issuer
among both US high-yield and EM investors,
has seen the cost of an already heavy dollar
debt burden exacerbated by a stronger
dollar.
“This is going to be a very tough
situation,” said a head of EM fixed-income
sales, noting that much of the debt is now in
the hands of US high-yield investors.
Moody’s cut Digicel Group Limited’s
corporate family rating to Caa1 from B2 on
Friday, saying it would consider the
company’s latest par for par debt exchange
as a distressed transaction.
The company launched in late August an
offer to exchange US$2bn in outstanding
8.25% 2020s for new 8.25% 2022s, and
US$1bn of 7.125% 2022s for a new 8.25%
senior cash pay/PIK notes due 2024.
Cash interest on the new 2024 will accrue
at a rate of 7.125%, while PIK interest will
accrue at an additional rate of 1.125% for a
total of 8.25%.
Holders who tender by the early bird date
of September 28 will receive US$950
principal amount plus a US$50 earlier
tender premium.
The deal is designed to extend the
company’s debt profile and give it somebreathing space to attend to its heavy
leverage.
Moody’s calculated that Digicel’s gross
debt to Ebitda stood at 6.7x as of March 31
and said that coupon levels on the new
notes are substantially lower than current
trading levels.
The dollar price on the 8.25% 2020s sank
to as low as 69.97 on Tuesday to yield nearly
30%. The price was down from an opening
level of 75.05, wiping out initial gains
following the debt swap announcement.
The 6% 2021s were trading as low as 89.45
to yield more than 10% earlier on Tuesday
after closing on Friday at 93.36, according to
MarketAxess data.
The company is changing its product
offering and pricing in an effort to improve
earnings and revenues, while also pursuing
asset sales to pay down debt, Moody’s said.
This comes as Digicel’s cash balance fell to
US$158m as of June 30 after drawing fully
on a revolving credit facility, the rating
agency said.
Fitch also downgraded Digicel Group
Limited’s rating to C from B– on Friday with
a negative outlook, while also cutting notes
issued by Digicel Limited to CCC from B–.
A downgrade to restricted default (RD)
could come after the completion of the
exchange, Fitch said.
“The terms of the exchange offer a
material reduction for DGL holders and this
action ... was necessary in Fitch’s view to
prevent a possible future default on the
2020 notes,” it said.CHILE
RED HOT (SANTANDER) CHILE PAPER
COMES INSIDE CURVEBANCO SANTANDER CHILE opened the post-
summer Swiss franc market for emerging
market issuers in style on Tuesday when it
brought an upsized long five-year note
inside its curve.
Books opened for a SFr100m minimum
clip at mid-swaps plus 55bp area and it came
slightly larger at SFr115m, pricing in line
with guidance. The coupon and yield were
0.441%. With 35 accounts taking across the
two leads, the average ticket was SFr3.28m.
The deal had a 10bp negative concession
with its outstanding 2022s trading around
plus 60bp before launch while its 2025s were
deemed too illiquid to be taken as reference.
Fair value was around plus 65bp for a new
December 2023, according to one lead official.
An all-Swiss roster of asset managers,
insurers and private banks took the majority
of the paper.
Credit Suisse and UBS were leads on the A1/
A/A rated deal.66 International Financing Review September 8 2018ALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Latin America
Managing No of Total Share
bank or group issues US$(m) (%)
1 Citigroup 33 11,933. 41 17 .6
2 JP Morgan 25 7 ,573.59 11. 1
3 HSBC 14 6,200.89 9 .1
4 Deutsche Bank 6 5,832.6 1 8.6
5 Morgan Stanley 12 4,656. 11 6.9
6 BAML 17 4,294.39 6.3
7 BBVA 4 2,811.40 4 .1
8 BNP Paribas 8 2,741.03 4 .0
9 Santander Global 13 2,628. 79 3.9
10 Itau Unibanco 13 2,254.02 3.3
Total 72 67 ,945.03
Excluding equity-related debt.
Source: Thomson Reuters SDC code: L38 Emerging 2250 p57-66.indd 66 07/09/2018 18:54:49