IFR International - 20.10.2018

KDB REAPS KANGAROO REWARDS

4HEû3OUTHû+OREANû+ANGAROOûPIPELINEûCOULDû
be set for a rebound following a triumphant
return by KOREA DEVELOPMENT BANK that can
only encourage copycat issuance.
+$"ûANû!A!!!!nûRATEDûSTATE
OWNEDû
development bank, took full advantage of
REDUCEDûTENSIONSûONûTHEû+OREANûPENINSULAû
TOûPRINTûITSûlRSTû+ANGAROOûBONDûISSUEûINû
almost three years on October 12.
Lower perceived geopolitical risks and
scarcity value underpinned a bumper order
book in excess of A$1.2bn for the A$400m
53M ûlVE
YEARûmOATING
RATEûNOTEû
offering.
“Constructive dialogue between the US
ANDû.ORTHû+OREAûHASûREDUCEDûGEOPOLITICALû
RISKûINûTHEû+OREANûPENINSULAûTOûTHEûLOWESTû
levels in many years and this has fed
through into tighter secondary market
spreads and increased demand for new
+OREANûPRIMARYûISSUESvûSAIDû!DAMû'AYDONû
syndication manager at ANZ, which has
BEENûONûALLûSIXû+$"û+ANGAROOûTICKETSûSINCEû
THEûGLOBALûlNANCIALûCRISIS
4HEûLEVELûOFûDEMANDûENABLEDûJOINTûLEADû
managers ANZ, TD Securities and UBS to price
THEû+$"û/CTOBERûSûBELOWûBPnBPû
guidance at three-month BBSW plus 98bp,
the tightest spread to date for a South
+OREANûISSUERûINûTHEû!USSIEûDOLLARûMARKET
!SIANûINVESTORSûBOUGHTûûOFûTHEûNOTESû
WITHû!USTRALIANûACCOUNTSûTAKINGûûANDû
%-%!ûû"ANKSûWEREûALLOTTEDûûASSETû
MANAGERSûûANDûOFlCIALûINSTITUTIONSû
0RICINGûWASûONLYûBPûWIDEûOFûTHEûBPû
spread for the A$2bn dual-tranche domestic
lVE
YEARûSALEûBYû.ATIONALû!USTRALIAû"ANKû
(Aa3/AA–/AA–) on September 18.
)TûWASûALSOûmATûTOûBPûINSIDEû+$"Sû53û
DOLLARûCURVEûUSINGûTHEû53Mûû
March 2023s as the best comparable, the
leads said.
+$"ûISSUEDû!MûOFûTHREE
YEARû
+ANGAROOû&2.SûINû.OVEMBERûûPRICEDûATû
THREE
MONTHû""37ûPLUSûBPûAûFULLûBPû
more than the 78bp margin paid by
Commonwealth Bank of Australia (Aa3/AA–/
!!n ûFORûITSû!BNûTHREE
YEARûmOATERûISSUEDûAû
month earlier.
In the absence of any localised concerns,
+$"ûWHICHûISûRATEDûONEûNOTCHûHIGHERûBYû
Moody’s and S&P and is viewed as a
sovereign proxy by investors, should price
mATûTOûTHEû!USSIEûMAJORSû3YDNEYûSYNDICATIONû
desks believe.
4HEû+$"ûDEALûWASûALLûTHEûMOREûIMPRESSIVEû
GIVENûITSûlVE
YEARûTENORûAûSEGMENTûTHATûHASû
been superseded by more defensive three-
year prints in recent months.
3INCEû*ULYûûûOFûALLû!USTRALIANûDOLLARû
issues have had three-year maturities versus
ûFORûlVE
YEARûPAPERûINûCONTRASTûTOûMOREû
STABLEûYEARSûINCLUDINGûûWHENûlVE
YEARû

maturities typically dominated, according to

ANZ.

Cross-currency basis swap levels are

MODERATELYûSUPPORTIVEûOFû+ANGAROOûISSUANCEû

at present. Last week’s 29bp Australian

DOLLAR53ûDOLLARûlVE

YEARûBASISûSWAPûISûABOVEû

THISûYEARSûBPûAVERAGEûBUTûDOWNûFROMûTHEû

MID

*ULYûPEAKûOFûBP

The wider the basis, the more attractive it

is for foreign companies to issue in

Australian dollars and swap back into home

currencies.

+$"SûEXCELLENTûRESULTûMAYûTRIGGERûAûRUSHû

OFûSUPPLYûFROMûOTHERû3OUTHû+OREANûSTATE

owned entities, which have previously

hunted in packs.

!û!MûTHREE

YEARû+ANGAROOûISSUEûINû

*ANUARYûûFROMû)NDUSTRIALû"ANKûOFû+OREAû

was followed within 11 months by similar

TRADESûFROMû+OREAû&INANCEû#ORPû%XPORT

)MPORTû"ANKûOFû+OREAû3HINHANû"ANKûANDû

+$"ûASûWELLûASûANûINAUGURALûCORPORATEû

+ANGAROOûFROMû+OREAû'AS

EUROPE/AFRICA

EGYPT

SOVEREIGN PLOTS SUKUK

EGYPTûPLANSûTOûISSUEûITSûlRSTûINTERNATIONALû

SOVEREIGNûSUKUKûINûTHEû

ûlNANCIALû

YEARûlNANCEûMINISTERû-OHAMEDû-AAITûSAIDû

on Wednesday.

Maait did not give the size of the planned

offering. Egypt is aiming to issue about

US$20bn in foreign currency-denominated

bonds by 2022.

Issuing sukuk could allow Egypt to attract

a new class of investor as it implements a

three-year IMF-backed economic reform

PROGRAMMEûAGREEDûINûLATEû

The country has borrowed heavily from

abroad since then and faces a tough repayment

schedule and a rising bill for oil imports.

%GYPTSûFOREIGNûDEBTûSTOODûATû53BNû

ATûTHEûENDûOFû*UNEûANûINCREASEûOFûûFROMû

the previous year.

%GYPTIANûOFlCIALSûHAVEûPREVIOUSLYûSAIDû

they intend to issue Islamic bonds, but the

plans did not materialise.

KAZAKHSTAN

REPUBLIC PLANS INTERNATIONAL

RETURN

KAZAKHSTAN has mandated banks for an

international bond offering, according to

people familiar with the matter.

One person said that the bond could

potentially be denominated in euros,

although the sovereign has historically

issued in US dollars.

+AZAKHSTANûWASûLASTûINûTHEûMARKETûINûû

when it raised US$4bn through a dual-tranche

TRANSACTIONû4HEû53BNûû*ULYûSû

AREûBIDûATûûTOûYIELDûûACCORDINGûTOû

4RADEWEBûPRICESûANDûTHEû53BNûû*ULYû

SûAREûTRADINGûATûûTOûYIELDû

+AZAKHSTANûISûRATEDû"AA"""

"""

NIGERIA

SENATE BACKS EUROBOND

NIGERIA’s upper house of parliament

approved on Wednesday a planned

53BNû%UROBONDûISSUEûBUTûADVISEDûTHEû

government to limit foreign borrowing and

instead increase revenues.

Nigeria, which emerged from recession

LASTûYEARûAPPROVEDûAûTHREE

YEARûPLANûINûû

TOûBORROWûMOREûFROMûABROADû)TûWANTSûûOFû

its loans to come from offshore to lower

borrowing costs and help to fund its record-

high budgets.

Lawmakers said the new bond issue will

RAISEûFOREIGNûBORROWINGûTOûûOFû.IGERIASû

TOTALûDEBTûFROMûûINû*UNE

On Wednesday, the government also

approved Citigroup, Standard Chartered and

LOCALûlRMûFSDH Merchant BankûASûlNANCIALû

ADVISERSûONûTHEûPLANNEDûBONDûISSUEûlNANCEû

minister Zainab Ahmed told reporters.

The Senate said it approved the issuance

but warned against accumulating too much

foreign debt. “The federal government

should do everything possible to reduce or

limit its request for more external

borrowing and (seek) other means of

generating revenue internally,” it said.

“This is to avoid a cleverly managed re-

conquest of our country through a debt

overhang.”

EMERGING MARKETS EUROPE/AFRICA

ALL INTL EMERGING MARKETS BONDS

BOOKRUNNERS: 1/1/2018 TO DATE

Europe/Africa

Managing No of Total Share

bank or group issues US$(m) (%)

1 Citigroup 34 10,285.34 13.6

2 JP Morgan 30 7,862.61 10.4

3 Deutsche Bank 20 6,919.81 9.1

4 VTB Capital 11 5,157.69 6.8

5 HSBC 15 4,314.49 5.7

6 Standard Chartered 9 4,004.97 5.3

7 SG 17 3,882.66 5.1

8 BNP Paribas 16 3,654.04 4.8

9 Goldman Sachs 8 3,369.31 4.4

10 Barclays 6 2,149.81 2.8

Total 82 75,771.01

Excluding equity-related debt.

Source: Refinitiv SDC code: L2