Middle East & Turkey
Dubai Islamic Bank announced the successful pricing of the largest senior Sukuk issuance by a financial institution globally. The US$1bn Sukuk was issued with a 5-year tenor, maturing on 14t February 2022. The issuance under DIB's US$5bn Sukuk programme carries a rate of 3.664%, reflecting the strong demand and confidence among global investors have in the UAE's largest Islamic bank.
Saudi Arabia has sent a request for proposals to banks for a planned U.S. dollar Sukuk, Reuters reported citing sources close to the deal. The debt sale would be Saudi's second international bond offering, after the sovereign issued a debut US$17.5bn bond in October last year in what was the largest bond ever sold across emerging markets.
The Kingdom of Bahrain has released pricing guidance in the 6.75% area for the tap of its international bond maturing in 2028, according to a document issued by the lead banks on Tuesday. Order books for the tap issue, capped at US$600mn, were in excess of US$1.6bn on Tuesday. Initial price guidance for the bond was in the 6.85% area earlier on that day.
The government of Oman is expected to announce the launch of a new U.S. dollar bond issue this week as it seeks to plug a budget deficit caused by low oil prices. Citi, HSBC, JP Morgan, Societe Generale and Standard Chartered have been appointed to lead the the upcoming debt sale, expected to be around US$1bn or more.
KIPCO – the Kuwait Projects Company (Holding) – has successfully completed the issuance of a US$500mn (KD152.5mn) bond under its US$3bn Euro Medium Term Note (EMTN) programme, with a simultaneous tender of its existing 2019 bonds. The ten-year fixed rate notes, issued at a fixed rate coupon of 4.5%, set a new benchmark for the issuer.
Africa
Gambia’s finance minister accused the former government of misappropriating millions of dollars from the Treasury, leaving the economy “completely destroyed.” Money was allegedly diverted in 2014 from a Treasury account created by ex-President Yahya Jammeh’s administration in the previous year, while a withdrawal was made from a so-called Special Projects Fund last year, Finance Minister Amadou told reporters Monday, adding that an official in the presidency made some of the withdrawals and more than US$5mn is missing.
Nigeria effectively devalued the naira for private individuals on Monday, paving the way for a possible broader move despite stiff resistance from President Muhammadu Buhari. With Buhari abroad for medical treatment and the country's currency exchange system in chaos, the Central Bank said Nigerians wanting dollars for travel or to pay foreign school fees could buy dollars at nearly 20% above the official rate.
Nigeria wants to borrow at least US$1bn from the World Bank, Finance Minister Kemi Adeosun said on Tuesday. Adeosun also told CNBC that Nigeria hoped to sign in the next few months a loan worth US$1.3bn from China's Export-Import Bank (Exim) to fund railway projects in the West African nation. Meanwhile, the minister also claimed that the country sees no need to apply for an International Monetary Fund programme as it is pursuing its own economic reform plan.
South Africa's competition watchdog has granted Barclays Africa conditional immunity from prosecution in return for its continuing cooperation in the rand currency rigging probe, the head of Competition Commission said on Tuesday. Meanwhile, Citigroup Inc agreed to pay a penalty of almost SAR70mn (US$5.4mn) to settle a South African antitrust investigation that said it participated in an alleged cartel to manipulate the value of the rand. The bank will also make witnesses available to help prosecute other lenders that participated in the alleged price fixing, including Bank of America Merrill Lynch, HSBC Holdings Plc, BNP Paribas SA, Credit Suisse Group AG, JPMorgan Chase & Co., Nomura International Plc, Commerzbank AG, Macquarie Group Ltd., Australia & New Zealand Banking Group Ltd., Investec Ltd. Standard Chartered Plc and Standard Bank Group Ltd.
Kenya is close to signing an US$800 million syndicated loan with four banks to help fund infrastructure projects and support the shilling, according to Bloomberg. East Africa’s biggest economy is expected to sign the three-year facility with Citigroup Inc., Standard Bank Group Ltd., Standard Chartered Plc and Rand Merchant Bank. So far, the shilling has been one of the worst performing currencies in 2017.
Latin America
Brazil's inflation rate appears to have eased below 5% in mid-February for the first time since 2012, according to Reuters. The Central Bank is very close to achieving its long-missed target and keeping the door wide open for interest rate cuts.
Brazilian Finance Minister Henrique Meirelles said cash-strapped states that sign up for a debt relief program would get three years to repay loans owed to the federal government and private banks as long as they commit to drastic spending curbs. According to the Minister, the new bill, which would be sent to Congress on Tuesday, is vital for Rio de Janeiro state in its bid to overcome a fiscal crisis and will require states to freeze wage hikes for employees and stop new hiring, while getting them to privatize their banks, electrical utilities and sanitation companies.
Mexico's Central Bank chief, Agustin Carstens, looks set to remain in office until the end of November, after President Enrique Pena Nieto asked Carstens to stay amid uncertainty about the impact of U.S. President Donald Trump's policies on Latin America's No. 2 economy. A source at the Central Bank, cited by Reuters, said Carstens had accepted the offer.
Asia
Chinese companies, which announced a record volume of overseas deals last year, are facing mounting regulatory scrutiny and hurdles obtaining offshore funding in their pursuit of assets abroad. In a latest example, reported by Bloomberg, Chinese billionaire Wang Jianlin’s Dalian Wanda Group Co. struggled to obtain the US$1bn necessary to complete the purchase of Golden Globe Awards producer Dick Clark Productions Inc. This follows last year’s announcement by the National Development and Reform Commission of China it is closely observing “irrational” outbound purchases, as part of China’s broader effort to limit capital outflows.
iQiyi.com, the video subsidiary of Chinese internet company Baidu Inc (BIDU.O), has raised US$1.53bn in new funds to compete with rivals in the country's hotly contested online entertainment sector. The investment took the form of convertible bonds issued by iQiyi to investors including Baidu, Hillhouse Capital, IDG Capital and Sequoia Capital, Baidu said in a statement on Tuesday. Baidu invested US$300mn as part of the issuance.
India has sanctioned a soft loan of US$340mn to Nepal for various infrastructure development programmes. Indian Ambassador to Nepal Ranjit Rae handed over the approval papers to Physical Infrastructure and Transport Minister of Nepal Ramesh Lekhak in the presence of Railways Minister Suresh Prabhu. Under this programme Mahalaki bridge and 15 roads will be constructed in various parts of Nepal.
Russia, CIS and Europe
The Republic of Slovenia has announced a tender offer for its US dollar bonds. It will also consider issuing a new euro-denominated bond as part of a reprofiling of its debt. Slovenia is targeting to buy back an aggregate amount of up to US$750mn of its 2022, 2023 and 2024 US dollar bonds, with BNP Paribas, Deutsche Bank, Goldman Sachs and SG CIB participating as managers.
Rosneft plans to complete its US$12.9bn acquisition of India's Essar Oil on 15 March, Reuters reported on Monday. The Russian oil giant is set to acquire a 49% stake in Essar and another 49% will be allocated between commodities trader Trafigura and Russian private investment group UCP. The process of receiving lender approvals for the deal completion is underway, with the necessary agreements expected to be signed by the end of February. Earlier, the media reported that Russian state-bank VTB provided US$3.9bn loan facilities to fund the acquisition.
The Russian Central Bank has not decided yet whether to set the Russian Orthodox Church-linked Peresvet Bank for a bailout; the decision will depend on the amount which creditors will agree to convert into subordinated bonds of the bank, a spokesperson for the authority was quoted as saying in the Russian media. The central bank appointed the Deposit Insurance Agency (DIA) as an interim administrator at Peresvet Bank, whose capital gap is thought to be anywhere between RUB35bn and RUB100bn.
