IFR Magazine - October 27, 2018

Kazakhstan was last in the market in
2015, when it raised US$4bn through a dual-
tranche transaction.
The US$2.5bn 5.125% July 2025s were bid
at 105.57 on Friday to yield 4.164%,
according to Tradeweb prices, and the
US$1.5bn 6.5% July 2045s were trading at
119.287 to yield 5.161%.
Kazakhstan is rated Baa3/BBB-/BBB.
Citigroup and Societe Generale are joint lead
managers and joint bookrunners and BCC
Invest is Kazakhstan lead manager.

SOUTH AFRICA

GRIM BUDGET AS SOVEREIGN HITS
THE ROAD

SOUTH AFRICA is due to meet investors, shortly
after the release of a bleak medium-term
budget policy statement put pressure on
sovereign paper.
Finance minister Tito Mboweni predicted
WIDERûBUDGETûDElCITSûANDûCUTûGROWTHû
forecasts in the MTBPS last Wednesday,
laying bare the challenges he faces at a time
of revenue shortfalls and ballooning debt.
The gloomy picture painted by the MTBPS
could presage South Africa (Baa3/BB/BB+)
being stripped of its last investment-grade
credit rating.
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they will not necessarily lead to a Moody’s

downgrade to non-investment-grade, in our

view,” said Societe Generale analysts.

“The relatively realistic approach of the

treasury can prevent the last investment-

grade rating to be cut in the near term.

However, a negative outlook is very likely.”

Moody’s said on Friday that the weaker

lSCALûOUTLOOKûINû3OUTHû!FRICAûWASûAûCREDITû

negative.

South Africa’s June 2030s, for example,

widened more than 30bp on the week to a

Z-spread of 331bp, according to Tradeweb,

as did the June 2048s, to 380bp.

A delegation from the sovereign will meet

investors for update meetings from

November 2 to November 9.

The country’s National Treasury said in

September that South Africa had no plans to

issue a bond before the end of the year.

Absa and JP Morgan are arranging the

meetings.

TUNISIA

NORTH AFRICAN SOVEREIGN SQUEEZES

THROUGH PRIMARY

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YEARûOVERûTHEûLINEûONû

Wednesday despite a frail backdrop and

ratings agencies taking a dim view of the

country’s economic outlook.

Although Reuters reported a government

source saying on October 20 that the

sovereign was planning to raise €1bn, a lead

said a smaller size had always been the

target.

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YEARû

within certain pricing parameters, and we

got all of those things,” said the lead. “It was

a tough day, and we saw other deals like

Tabreed struggle, but getting it done was

remarkable in and of itself.”

UAE cooling company Tabreed had just

enough orders to cover a US$500m October

2025 sukuk transaction, with interest of

some US$720m including lead orders.

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The market backdrop was not

straightforward, with equity markets selling

off during the day.

Tunisia started marketing the October

2023 benchmark at low 7% area IPTs. Its

February 2024s were quoted at 6.73% on

Tradeweb.

One banker away saw those at 6.70% and

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YEARûFAIRûVALUEûINSIDEûTHATûLEVELûTOû

give a concession of 40bp-50bp. A second

lead saw the premium in the middle of that

range.

Pricing was tightened for a print at a 7%

yield.

The second lead said the most important

aspect was getting the trade through the

doors.

“It’s still a challenging story in some

respects, so to get a euro benchmark done

was a good outcome,” he said.

EMERGING MARKETS EUROPE/AFRICA

3.45% area - - - DBS -
BBSW/ASW+98 area -3 A$830m Aa2/AA/AA- ANZ/Miz/TD Asia 51%, Oz 41%, EMEA 8%. Bks 66%,
AM 25%, OI 5%, Other 4%.
T+190 area 10-15 >US$1.25bn, 94 acs A3/BBB BNPP/CIMB/Citi/HSBC Asia 82%, Eur 15%, ME 3%. FM 44%, Bks
42%, Ins/PF/Sov 14%.
MS+50 area,
MS+40/45

• 
  

  
  

  €1.65bn Aa2/-/AA- BNPP/DBS/ING/SG EMEA 90%, Asia 10%. AM/FM 60%, Bks
  24%, CB 16%.
  T+165 area, T+140
  area +/-5

  
  

  
  


• US$493m -/-/A- JPM/BAML/BOCI /ICBC/BOCOMI APAC 88%, EMEA 12%. AM 34%, Bks/Ins
  30%, Sov 22%, PB/Other 14%.
  T+190 area, T+175
  area +/-5


• US$1bn -/-/A- JPM/BAML/BOCI /ICBC/BOCOMI APAC 86%, EMEA 14%. AM 65%, Bks/
  Ins 13%, Sov 7%, PB/Other 15%.
  3.5% area,
  3.15%/3.2%


• HK$2.9bn A1/A+ DBS/HSBC Asia 97%, Eur 3%. FM/Ins 63%, Bks
  34%, PB 3%.
  4.7% area - Rmb1.3bn A1/A+ DBS/HSBC Asia 92%, Eur 8%. FM/Ins 52%, Bks
  45%, PB 3%.
  MS+300 area,
  MS+290 area

15 US$3.5bn Baa3/BB/BBB- GIB/HSBC/JPM/KFH/StCh -

MS+low/mid 200s - >US$720m Baa3/-/BBB ADCB/ADIB/JPM/Mashreq -
Low 7% area,
7%

25 >€1.1bn B2/-/B+ Citi/DB/JPM/Natx UK 38%, US 33%, Eur 27%, Other 2%.
FM 85%, Bks 11%, Ins/PF/Supra 3%,
HF 1%.
100.238 area,
100.363-100.413

• 
  
  
  
  • 
    

    -/BBB-/BBB- BoC/Barc/Citi/SPDB/Industrial/
    GuotaiJunan/Orient

    
    
  
  
  
  

9.25% area,
9.125% area,
9%

12.5 ~US$4.9bn combined -/B-/B- BNPP/Citi/GS/JPM -

10% area,
9.875% area,
9.75%

12.5 ~US$4.9bn combined -/B-/B- BNPP/Citi/GS/JPM -

MS+65 10 SFr115m, 22 acs A1/A BNPP Switz 100%. AM 64%, Tsy 24%, PF 6%,
Ins 4%, Other 2%.

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution