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The week got off to a busy start on Monday with investment-grade toll-road company Korea Expressway tapping the dollar market for $500 million and Lippo Karawaci increasing the size of its existing 7% 2019s with a $100 million tap.
Shortly after that, Indonesia state-owned utility company Perusahaan Listrik Negara (PLN) was in the market with a 30-year bond on Tuesday. The initial guidance was at 5.625%. Barclays and Citi are joint bookrunners.
“It’s going to be another busy week, with another 10 deals and most of the deals coming towards the latter part of the week,” said one debt banker.
Among these deals are Thai state enterprise PTT, which concludes roadshows on Wednesday for its potential dollar bond offering. Barclays, Citi, Deutsche Bank and J.P. Morgan are the arrangers. From India, Bharat Petroleum also concludes roadshows this week and is expected to tap the market with a $500 million debut bond. HSBC, Citi and Royal Bank of Scotland are the arrangers.
In China’s high-yield market, China Tianrui Group Cement started investor meetings on October 9 and concluded them last week. According to a source, the leads are giving investors time to complete the credit work. China Tianrui has in the past held roadshows though, with no deal materialising. Deutsche Bank is the sole global coordinator and bookrunner. Citi is also a bookrunner. The notes are expected to be rated B by Standard & Poor’s and B2 by Moody’s.
The Republic of the Philippines last week held luncheon meetings with investors in Hong Kong. The sovereign funding officials were in town for the Asean finance ministers’ meeting in Hong Kong, held on October 8 and 9.
According to a source, the Philippines held general update meetings with investors and they were not connected to any financing. However, investors are expecting a deal before the end of the year and reports have indicated that the sovereign plans to raise about $1 billion equivalent through a global peso note and embark on a liability management programme. “We are expecting the Philippines to do something in the coming weeks,” said one Hong Kong-based investor.
The meetings were arranged by no fewer than eight banks — Citi, Credit Suisse, Deutsche Bank, ING, J.P. Morgan, HSBC, Standard Chartered and UBS. The Philippines issued two global peso notes in January 2011 and September 2010. Those notes initially sold off heavily when onshore rates rose, but they have since recovered.
Korea Expressway
Korea Expressway on Monday paid a visit to investors with its $500 million five-year bond, which came at a negative new-issue premium of 8bp to 10bp, versus outstanding comparables such as Korea Gas and Korea National Oil Corp. The bonds priced at Treasuries plus 130bp, at the tight end of final guidance and 25bp inside of initial guidance, which was at Treasuries plus 155bp.
Korea Expressway’s last liquid issue was a $700 million bond maturing March 2015 — which was issued in 2009. But the most relevant comparables were Korea Gas and Korea National Oil Corp — which have both issued bonds this year and whose bonds were trading at Treasuries plus 135bp/140bp, on a curve-adjusted basis.
The bonds traded tighter at Treasuries plus 125bp/123bp in secondary markets on Tuesday afternoon. The deal attracted an order book of $3.25 billion from 200 accounts. Asian investors were allocated 64%, European 20% and US 16%. Fund managers were allocated 64%, banks 22%, public sector 8% and retail 6%. The coupon was fixed at 1.875% and the notes reoffered at 99.597 to yield 1.96%.
Bank of America Merrill Lynch, Deutsche Bank, J.P. Morgan and RBS were joint bookrunners.
