Ferrexpo, a Ukrainian iron ore pellet exporter, appears to be struggling to secure bond holder approval to exchange its $500m notes due 2016 and has extended the early bird deadline to February 17. Analysts thought the offer was a good one but are unable to identify what proportion of bondholders have already given their consent.
The saga is also continuing for Russian Standard Bank which has been attempting to update its 10.75% 2018 notes since early late November. The bank has increased the late consent fee,which it also did on its first attempt, to $50 per $1,000 of notes. This is in line with the early bird fee. Russian steel company Severstal also increased the tender offer price for its 2016s and 2017s this week.
Leadson NBAD's bond released initial price thoughts at 90bp over mid-swaps on Wednesday morning and books were already over $1bn as GlobalCapital went to press.
YPF offers Argentina chance
Moody's warned on Tuesday that conditions would continue to be tough for LatAm high yield borrowers as rising US rates dampen appetite for higher risk assets, but investors are still finding stories they like and two of these companies may issue this week to reopen the corporate sub-investment market in the region.
Only the Dominican Republic sovereign has issued a high yield bond this year from LatAm, but Argentine oil company YPF is planning to raise $750m through a tap of its 2018s and 2024s on Wednesday, while Mexican transportation company Grupo Senda (B/B) could issue a $200m seven year after finishing a roadshow on Tuesday. Investors are finding reasons to like both companies.
YPF provides exposure to an Argentina that many investors are hoping will take a market-friendly turn in October after the presidential elections. And with YPF guaranteed dollar inflows, the oil company's bond in fact offer little or no concession to the sovereign in terms of spreads.
Senda, meanwhile, should benefit from the lower oil prices that are causing volatility in much of the high yield market.
However, Fitch's downgrade of Petrobras to BBB- on Tuesday provided a further blow to appetite for credit in Brazil, the jurisdiction that homes more high yield borrowers than anywhere else in Latin America.
Africa dominates loans
In the syndicated loans market, Africa remains the area of most activity, but even that continent has hit a bit of a lull. But bankers say that this is the calm before the storm, with a barrage of deals expected to come through by the end of the month.
Nigeria could miss out on this, however. It has seen a number of loans signed in recent months, but with general elections set to take place on February 14 and the economy under pressure from the falling oil price, appetite for new business has slowed.
One deal still on the way from Nigeria is IHS Towers’ $800m acquisition loan, which was signed in December. Bankers close to the deal say that final commitments are coming in and that it could close within the next week.
Elsewhere, South Africa’s Investec Bank was set to close a three year loan on Wednesday that will be bigger than its original $300m size. Standard Chartered and Commerzbank are co-ordinating the loan, which is a limited club deal and was oversubscribed.
And Afren, the Africa-focused oil exploration company listed on the London Stock Exchange, has avoided default on a $300m loan after obtaining a deferral from banks on the $50m amortisation payment that was due on Saturday January 31 for its Ebok debt facility.
The agreement, which sets a new date for payment of February 27, gives the company critical added time to raise additional capital. The company has also entered into a 30 day grace period on a $15m interest payment it was due to pay on Sunday February 1 for its $500m February 2016 bond.
Francesca Young +44207 779 7313
Steve Gilmore +44207 779 7298
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