Sibanye is looking to purchase up to
US$350m of its US$500m 6.125% 2022s and
US$550m 7.125% 2025s. The tenders are
capped at US$150m and US$200m, for the
2022s and 2025s respectively.
The early tender premium is US$30 per
US$1,000 principal amount of notes. The
early tender deadline is September 17 and
the offer expires on October 1.
Sibanye has also accepted an aggregate
principal amount of US$66m of its
convertible bonds for purchase, for a total
purchase price of around US$50m.
Barclays and Absa are the international
dealer managers.MTN FACES POSSIBLE MOODY’S
DOWNGRADEMTN GROUP is under review by Moody’s for a
possible credit rating downgrade after the South
African mobile phone operator said it was being
asked to pay a total of US$10.1bn by authorities
in Nigeria, the ratings agency said on Thursday.
Africa’s biggest wireless phones group
said on Tuesday the Nigerian Attorney
General was seeking US$2bn in taxes
incurred over the last decade, days after an
order from the Central Bank of Nigeria that
MTN’s Lagos-based unit hand over US$8.1bn
that it said was illegally sent abroad.
“MTN’s ratings have been placed on review
for downgrade to reflect the uncertainty
around the potential implications of the
recent CBN and NAG announcements on
MTN’s credit profile,” Moody’s said.
MTN, whose debt stands at around R57bn
(US$3.7bn), has said the CBN’s allegations
are without merit and it would hold talks
with authorities to defend its position.ZAMBIA
BONDHOLDERS ABANDON
DEBT-RIDDEN COUNTRYZAMBIA’s dollar notes have lost almost 20
points over the past two months, with
holders shedding paper that has lost its
sheen thanks to rising external debt and
alarm bells rung by the IMF.
The IMF said in late August that
discussions over an aid programme were on
hold because Zambia’s borrowing plans
remain unsustainable. The country’s
external debt rose to US$9.37bn by the end
of June from US$8.7bn in December.
“Talks with the IMF have been slow, the
budget deficit is estimated by the IMF to be
close to 8% of GDP for 2018 and copper, which
makes up around three-quarters of Zambia’s
exports, is down by around 20% since its peak
in early June,” said Richard Briggs, emerging
markets strategist at CreditSights.“Zambia has been trying to secure an IMF
loan for several years but hasn’t yet been
able to secure funding.”
The country, which is Africa’s second-
largest copper producer, wants a US$1.3bn
loan from the IMF but the chance of a deal
depends on its debt management plans.
A trader said that the inability to find
common ground with the IMF and tackle
the country’s debt problems was hurting the
sovereign’s bonds.
“Zambia’s efforts to impersonate an
ostrich is not going down well, so their
dollar bonds make new lows, with even the
2027s above 15% now and local paper paying
double that,” said the trader.
Zambia’s US$1.25bn 8.97% July 2027s
opened August bid at 89.75 and yielding
10.778%, according to Tradeweb. But value
has bled away with the notes losing nearly
20 points by Friday. They were last bid at
71.50 to yield 15.34%.
The sovereign said last December that it
would begin refinancing Eurobonds worth a
total US$3bn in 2019 to reduce the cost of
debt servicing.
In June, Zambia decided to delay all
planned borrowing indefinitely, slowing
down the accumulation of new debt amid
worries about the risk of distress. Zambia
(Caa1/B–/B) has been downgraded by both
Moody’s and S&P in recent weeks.MIDDLE EAST
UAE
S&P CUTS CREDIT RATINGS ON
TWO DUBAI FIRMSTwo Dubai state-owned companies saw their
ratings cut by S&P last week, with the agency
saying a weakening economy in the emirate
was hurting the government’s ability to extend
emergency support to the firms if needed.
The downgrades were a fresh sign of
pressure on Dubai’s economy, where the
real estate and equity markets are slumping.
The emirate does not have a sovereign credit
rating, so analysts often look at state firms
as indicators of its financial health.
“In our view, credit conditions in Dubai have
deteriorated, which we believe affects the
government’s likely ability to provide
extraordinary financial support to its
government-related entities if needed,” S&P said.
The Dubai government’s media office
could not immediately be reached for
comment.
S&P lowered its rating on utility Dubai
Electricity and Water Authority (DEWA) lateon Tuesday to BBB from BBB+, assigning it a
negative outlook, which indicates a
significant chance of a further downgrade in
future.
It was S&P’s first outright downgrade of
DEWA. The agency had previously upgraded
the company in 2012 and 2016, as the
emirate recovered from a credit crisis that
nearly caused it to default on its debt. A
default was averted with US$20bn of aid
from neighbouring Abu Dhabi.
“The negative outlook on DEWA reflects
the possibility that our assessment of
Dubai’s creditworthiness could deteriorate
further in the next two years, which would
put further pressure on our rating on
DEWA,” S&P said.
“This is because we assume that the
government could use its power to
intervene negatively, which could include
burdening the company with additional
dividends, taxes, or other liabilities.”
S&P also lowered its rating for real estate
firm DIFC INVESTMENTS (DIFCI) to BBB-, one step
above junk status, from BBB, but with a
stable outlook. DIFCI owns an office and
retail complex in Dubai’s international
financial centre.
Analysts say that the pressures on Dubai
are not as serious as those it faced a decade
ago, and it has strengthened its finances
since then by restructuring billions of
dollars of debt at state-linked firms.
But as the region’s top business centre, it
has been hurt by an economic slowdown in
Saudi Arabia and other nearby countries due
to low oil prices. Political tensions with
Qatar and Iran, and increasing competition
for investment capital with Saudi Arabia,
have also dampened business.
Dubai government bond prices and the
cost of insuring Dubai sovereign debt
showed little reaction on Wednesday to the
S&P downgrades, partly because many
investors assume Dubai can count on
further aid from Abu Dhabi if necessary.International Financing Review September 8 2018 65EMERGING MARKETS MIDDLE EAST
ALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Middle East
Managing No of Total Share
bank or group issues US$(m) (%)
1 Standard Chartered 36 8,641.81 14 .0
2 Citigroup 16 5,869.08 9 .5
3 HSBC 25 5,678.95 9 .2
4 Deutsche Bank 8 4,220.89 6.8
5 JP Morgan 8 3,544.32 5. 7
6 Barclays 11 3,162.96 5. 1
7 Credit Suisse 7 2,571.38 4 .2
8 Al Khaliji Commercial Bank 2 2,082. 76 3. 4
9 Goldman Sachs 3 1,930.39 3. 1
10 Credit Agricole 9 1,882. 72 3. 1
Total 78 6 1,646.70
Excluding equity-related debt.
Source: Thomson Reuters SDC code: L58 Emerging 2250 p57-66.indd 65 07/09/2018 18:54:49