The sovereign began marketing the notes,
expected to be rated Baa3/NR/BBB-, at swaps
plus 300bp area on Wednesday, having held
an investor call the previous day.
Markets, though, took a sour turn during
the bookbuild, with risk-off sentiment
taking hold.
Oman was nevertheless able to make
inroads, moving pricing to 290bp area and
THENûTOûAûlNALûBP ûRESULTINGûINûAûNEWû
issue premium of around 15bp.
“The fact Oman was able to raise a
substantial amount at a decent price was
very good for an EM issuer, particularly
given the context of the markets,” said a
lead.
He reckoned Oman had been helped by
investor familiarity with the name, as well
as its inclusion in JP Morgan’s EMBI Global
$IVERSIlEDûINDEX
$EMANDûPEAKEDûATûOVERû53BN ûWITHû
orders from both real money and Islamic
accounts.
The bonds traded down around 10 cents
from their reoffer price on the break.
4HEûTRADEûWASûTHEûSOVEREIGNSûlRSTûSINCEû
Moody’s lowered Oman a notch to Baa2. The
downgrade was based on an expectation
THATûITSûlSCALûANDûEXTERNALûMETRICSûWOULDû
continue to worsen, and that subdued
growth over the next few years will weaken
economic resiliency.
Moody’s and Fitch both have a negative
outlook on Oman, while S&P has it pegged
in high-yield territory at BB stable.
Societe Generale analysts, however,
upgraded their position on the sovereign to
slightly overweight during the week thanks
to oil trading well above US$70 per barrel,
which in turn has eased pressure on the
current account.
h4HEûDElCITûINû ûSHOULDûBEûBROUGHTû
BACKûTOûûOFû'$0 ûAûDRAMATICû
improvement relative to the last three years
WHENûTHEûDElCITûAVERAGEDûAûWHOPPINGû
16.5%. The relief has been very tangible for
PUBLICûlNANCESûTHEûlSCALûDElCITûSHOULDûDROPû
TOûûOFû'$0ûTHISûYEAR ûVERSUSûûINûû
and 21% in the previous year,” the analysts
said.
Societe Generale expects an observed rise
in Oman’s public and external debt levels to
be held in check to an extent by more
supportive oil prices.
In the latest trade, Oman followed its
established strategy of following up a
conventional deal with an Islamic trade. The
sovereign started off its year in international
markets with a US$6.5bn conventional bond
INû*ANUARY ûEQUIVALENTûTOûûOFûITSû'$0
Gulf International Bank, HSBC, JP Morgan,
KFH Capital and Standard Chartered were joint
lead managers.UAE
MUBADALA LOOKS TO LENGTHEN
PROFILEMUBADALA, the investment company
indirectly wholly owned by the government
OFû!BUû$HABI ûWASûONûTHEûPHONEûWITHû
investors on Wednesday, having announced
intentions for a tender and 10-year US dollar
benchmark.
The issuer (Aa2/AA/AA) is looking to
EXTENDûITSûMATURITYûPROlLE ûANDûISûOFFERINGûTOû
repurchase its US$750m 2021s and
US$750m 2022s.
“It’s all tender money that they want,”
said a banker familiar with the matter.
“There is no new money involved, so theycan only execute the new trade after the
bondholders have tendered their notes.”
The tender offer expires October 30, with
pricing of the notes expected for the day
after.
BNP Paribas and Citigroup are global
coordinators, alongside First Abu Dhabi Bank,
Natixis and Standard Chartered as joint lead
managers.TABREED NUDGES SEVEN-YEAR
THROUGHUAE cooling company TABREED had to battle
an unhelpful market backdrop and
competing Islamic supply from Oman on
Wednesday, gaining just enough orders to
cover US$500m October 2025 sukuk.
$EMANDûTOPPEDû53M ûINCLUDINGûLEADû
interest, on a day when the S&P index
dropped by 3.1% and Oman was in the
market raising US$1.5bn with a higher-
PROlLEûSOVEREIGNûDEAL
Tabreed, a very rare name in the
international bond market, printed at 5.50%,
equivalent to around swaps plus 234bp.
The issuer had started marketing in the
low-to-mid 200s over swaps.
“The Tabreed book was relatively weak,”
said a banker away from the deal. “Pricing
also didn’t go very far.”
A banker familiar with the matter said the
most important aspect of the trade was for
Tabreed to achieve its target of placing a
benchmark deal.
“They wanted to raise US$500m and they
got that. They got international demand
alongside locals, in excess of what was
required, and the bonds have traded up,” he
said.
The banker said it had been a case of price
discovery for the trade, given a lack of direct
comparables.
“You could have looked at other Triple B
names like MAF or Emaar Properties but
they are all quite different. If you move
outside the UAE, then you could look at
things like Omani utilities, but the Oman
angle makes those names trade wide, so
there was no perfect way of doing it,” he
said.
Tabreed is Baa3 by Moody’s and BBB by
Fitch with stable outlooks.
Mubadala holds a 42% stake in the
company, while Engie is the other major
shareholder with 40%. Fitch rates Tabreed
on a standalone basis, given what it calls
weak legal and moderate operational and
strategic links with Mubadala.
Mubadala stepped in to provide support
in 2011 in a restructuring deal for bank debt
belonging to Tabreed.
Abu Dhabi Commercial Bank, Abu Dhabi
Islamic Bank, JP Morgan and Mashreqbank were
joint lead managers on the sukuk.EMERGING MARKETS MIDDLE EASTEXOTIC DEBT PRICES: 25/10/2018
Bid Offer
Americas
Cuba (€) 19.00 20.00
Cuba (¥) 18.00 20.00
Guyana/PD–trade 80.00 90.00
Honduras trade 30.00 40.00
Nicaragua/Loans 16.00 19.00
Suriname trade 12.00 14.00
Africa
Angola 111.99 112.12
Benin 10.00 15.00
Burkina-Faso 8.00 10.00
Cameroon trade 22.00 32.00
Cape Verde trade 75.00 85.00
Central African Rep trade 0.50 1.50
Congo/trade 25.00 30.00
Congo (Dem Rep) 3.75 6.75
Cote d’Ivoire 92.75 93.75
Equatorial Guinea trade 85.00 90.00
Ethiopia 2.00 4.00
Gabon PD-Trade 72.00 82.00
Ghana 88.00 92.00
Guinea-Bissau trade 7.00 10.00
Guinea 8.00 13.00
Kenya trade 45.00 55.00
Liberia PD trade 9.00 12.00
Madagascar (trade) 27.00 34.00
Mali PD trade 2.00 6.00
Mozambique (trade) 6.00 12.00
Senegal 24.00 26.00
Sierra Leone PD-trade 1.00 5.00
Tanzania 12.00 16.00
Uganda trade 16.00 18.00
Zambia PD-trade 15.00 22.00
Asia
Bangladesh 70.00 80.00
Cambodia trade 6.00 12.00
Mongolia 27.00 38.00
Myanmar trade 27.00 32.00
Nepal trade 13.00 16.00
North Korea/Loans 0.50 2.00
Papua New Guinea 85.00 95.00
Vietnam 99.00 99.50
Source: Wesbruin Capital