4HEûSOLICITATIONûAGENTSûWEREû".0û0ARIBAS û
#ITIGROUP ûDeutsche Bank û&IRSTû!BUû$HABIû
"ANKûANDûBank of America Merrill Lynch.DAE LANDS SHORT OF TARGETState-controlled DUBAI AEROSPACE ENTERPRISE
printed a US$1bn dual-tranche offering on
4HURSDAY û53MûLESSûTHANûWASûORIGINALLYû
advertised.
4HEûAIRCRAFTûLESSORû"A"" ûSOLDûAû
US$500m November 2021 note at 5.25% and
a US$500m November 2023 tranche at
û"OTHûBONDSûCAMEûINûLINEûWITHûPRICEû
talk. The deal targeted predominantly US
high-yield accounts.
4HEûPROCEEDSûWILLûBEûUSEDûTOûRElNANCEû
existing secured indebtedness.DAE raised US$2.3bn in 2017 through a
TRIPLE
TRANCHEûBONDûOFFERINGûTOûlNANCEûITSû
acquisition of Dublin-based AWAS. The
transaction saw DAE become one of the
world’s largest aircraft lessors.
The joint bookrunners were Morgan
Stanley, BNP Paribas, Credit Agricole, Deutsche
Bank, Goldman Sachs, HSBC, Mizuho, Natixis and
SunTrust.AMERICAS
BRAZIL
ODEBRECHT ENTERS GRACE PERIOD
ON 2025 BONDODEBRECHT’s construction unit decided to use
the grace period on its US$550m 4.375%
ûNOTES ûMARKINGûTHEûSECONDûTIMEûTHISû
year it has made such a move.
The company owed a US$11.4m coupon
on the bonds on October 25 and the missed
payment triggered a downgrade by Fitch
and S&P to C and CC respectively.
“Despite available cash balance for the
COUPONûPAYMENT û/%#ûDECIDEDûTOûENTERûINTOûAû
grace period and revise its short and long-term
LIQUIDITYûSTRATEGIES vûTHEûRATINGûAGENCYûSAID
The move poses a threat to future
coupons such as the US$60.8m due on
December 2018 and US$91.8 owed during
THEûlRSTûHALFûOFû ûITûSAID
S&P calculates that the company has a
CASHûPOSITIONûOFû53M
53M ûWHICHû
together with about US$150m in Ebitda
should be enough to cover short-term debt
and operating expenses.
Some analysts wondered whether the
missed payment - which the company had
the cash to pay - was a move to opening
restructuring talks with bondholders.
“After having not much success in
booking new contracts to rebuild backlog
maybe management’s thinking now is to
RIGHTûSIZEûTHEûDEBTûLOAD vûWROTEûONEûANALYST
S&P said that a restructuring or an
outright default is likely in the short-term.MINERVA TAKES ANOTHER STAB AT PERP
TENDER"RAZILIANûBEEFûCOMPANYûMINERVA has
launched a consent solicitation and cash
tender for any and all of its US$291.2m of
outstanding 8.75% perpetual notes.
Holders who tender and agree to the
consent solicitation by November 15 are
ENTITLEDûTOûAûBUYBACKûPRICEûOFû û
including an early tender payment of US$20
FORûEACHû53 ûINûPRINCIPALNeighbourly support
smoothes Noga revival
BAHRAIN Oil and gas company resurrects tradeBahrain state-owned company NOGAHOLDING
revived a trade on Wednesday that was
postponed in May because of choppy conditions,
raising US$1bn through a dual-tranche offering.
Six months ago not only were broader
emerging markets on edge thanks to a
rebounding US dollar, but also Bahrain
specifically was in the line of fire.
While the broader market backdrop remains
unsettled, the prospect of economic support
to Bahrain from allies led by Saudi Arabia has
calmed immediate fears about the kingdom’s
public finances.
That paved the way for Noga, which plays
a key role in the execution of the Bahraini
government’s policy in the oil, gas and
petrochemical sectors, to remarket its trade,
albeit in a slightly different structure to before.
While in May, Noga announced plans for a
seven-year issue, this time it offered six and 10-
year notes.
A lead said going for a dual-tranche trade
reduced execution risk given the size which
Noga was targeting, and also brought down the
average cost of funding and helped develop the
issuer’s curve.
Noga began marketing its six-year at 7.875%
area and a 10-year at 8.50% area.
A banker away reckoned fair value for the
shorter note was around 7.25% and in the high
7s for the 10-year. The lead said fair value would
be 75bp back of the sovereign, and saw fair value
at around 7.45% and 8% respectively.
Noga’s shorter note saw a revision of 25bp
from initial talk for a print at 7.625%, while the 10
year was cut by 12.5bp to price at 8.375%.“Both Noga and the sovereign had executable
deals pre-summer, but at very wide levels.
Bahrain could save face by doing a sukuk but
Noga didn’t have that chance, nor did they want
to pay 9.50%,” said the lead. “They waited and
managed to save 100bp.”
“For a high-yield Bahraini Double B rated
borrower I would say those levels are attractive
but not cheap,” he added.
Fitch rates the issuer BB- with a stable
outlook.
The notes, which will be EMBI-eligible once
Bahrain is included in the relevant JP Morgan
indices, saw overall demand of about US$2.5bn,
with a skew to the 2024s. Accounts from the UK
and the US were the dominant players in the
allocations.
“Orders in EM aren’t as oversubscribed as they
have been but the quality is still there,” said a
second banker away. “Hedge funds and private
banks – those who wanted a quick buck – are
not participating as much. They had their fingers
burnt and have stepped aside.”
The bonds performed firmly on the break,
carrying a strong follow through into the
secondary market.
“Noga has traded very well despite Treasuries
selling off,” said a trader on Thursday.
He saw both tranches, which priced at par, close
on Thursday around 1pt up in secondary at 101.
BNP Paribas, Citigroup and JP Morgan were
joint global coordinators and Bank ABC, Gulf
International Bank, HSBC, National Bank of
Bahrain, Societe Generale and Standard Chartered
are joint lead managers.
Robert HoggALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Middle East
Managing No of Total Share
bank or group issues US$(m) (%)
1 Standard Chartered 49 10,746.05 13.7
2 HSBC 39 8,170.48 10.4
3 Citigroup 27 7,863.36 10.0
4 JP Morgan 18 5,029.19 6.4
5 Deutsche Bank 8 4,220.89 5.4
6 Barclays 18 4,055.05 5.2
7 Credit Suisse 8 2,672.16 3.4
8 BNP Paribas 12 2,268.27 2.9
9 Credit Agricole 11 2,140.99 2.7
10 Al Khaliji Commercial Bank 2 2,082.76 2.7
Total 99 78,373.06
Excluding equity-related debt.
Source: Refinitiv SDC code: L5