Citi adds new high yield mandate to its DCM pipeline

Noble Finance, an Indonesian SPV, has mandated Citigroup for a propsed dollar-denominated high-yield bond offering.
Property holdings special purpose vehicle (SPV) Noble Finance BV has awarded Citigroup the mandate for a proposed dollar denominated Reg-S/144a high-yield bond offering. Citigroup will act as sole bookrunner, as well as joint lead manager with PT Batavia Prosperindo Sekuritas.

This deal should not be confused with the similarly named Noble Group, listed in Singapore. In March of 2005, Noble, a commodity trading company, launched a $700 million Ba1/BB+ bond deal via sole bookrunner JPMorgan.

As yet Noble Finance has not established any outline in terms of final size and tenor.

The notes will be unconditionally and irrevocably guaranteed on a joint basis by PT Mulia Intipelangi, PT Mulia Intanlestari and PT Sanggarcipta Kreasitama, who own and operate a shopping mall, a five star hotel and commercial buildings in Jakarta, respectively.

In terms of looking for comparables for this deal, most bankers are quoting Lippo KarawaciÆs B2/B+ rated $250 million five-year deal. That deal, completed in March, was also issued through an SPV, Lippo Karawaci Finance BV û a Dutch-based finance subsidiary. Lippo was yesterday quoted at a yield of around 10%.

Although the Asian debt capital market has been a stuck in the doldrums for the past few months, miraculously banks are still winning mandates.

At the time being most of AsiaÆs investment banks are sitting on healthy pipelines, unfortunately the execution environment is still looking poor, especially for the high-yield contingent.

Indeed, most bankers are probably waiting for the water to be tested by either the Philippine or Indonesian sovereign û both of which are sub-investment grade and have benchmark size deals looking to come to market sometime this year. These deals will help them to assess the landscape before deciding to launch any corporate high-yield deals.

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