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Bonds Poll - Emerging Markets Awards Analysis

22 Feb 2008

Deutsche’s deals were spread across eastern Europe, Turkey and the Middle East, and included June’s $1.25bn debut sukuk by DIFC Investments, January’s Eu1.5bn deal for the Republic of Poland and HBOR’s Eu250m and Zagrebacki’s Eu300m 10 year deals.

In July, it priced one of the year’s more exciting corporate transactions, the $200m three year from Kuzbassrazrezugol, and in October led VTB’s dual tranche $2bn issue.

Assured execution amid tumultuous markets won Deutsche plaudits from its peers. A prime example was VTB’s dual tranche Eu1bn/£300m issue in March. Deutsche was a bookrunner alongside Barclays Capital, BNP Paribas and HSBC. Volatility hit the markets in late February, forcing the leads to re-assess their strategy after a roadshow. They priced a deal tailored to volatile markets — a short dated euro floater. The following week, after watching the markets closely, they priced the £300m three year deal at 70bp over mid-swaps, the tight end of guidance.

Prolific Gazprom

The EEMEA market’s most prolific borrower has earned itself a reputation for realism. During the course of 2007, Gazprom managed to manoeuvre itself to take advantage of windows of opportunity in the markets and raised more than $10bn equivalent in 13 issues and has been voted Best Overall CEEMEA Borrower.

Its CDS and secondary spreads have suffered not only as a result of market volatility but also because of supply expectations. Gazprom’s CDS bulged out from May’s all-time tights of 29bp to 169bp in November, before stabilising around 135bp in December.

In February, Gazprom blazed a trail to the rouble Eurobond market when subsidiary Gazprombank priced a Rb10bn three year issue. The deal marked the first time a rouble denominated instrument was able to be paid and settled on Clearstream and Euroclear. The deal was priced at 7.25%, the tight end of talk.

In October, it became the first corporate issuer out of the EEMEA region to price a yen deal, bringing a dual tranche ¥50bn issue through Citigroup and Mizuho.

In May, it brought a dual tranche £800m 2013 and Eu700m 2014 deal. In October, despite consternation from the market, it bravely opted to print a Eu1.2bn 10 year deal that affirmed its reputation as a high class borrower — realistic, flexible and innovative.

Dubai Holding all the aces

Sheikh Mohammed bin Rashid Al Maktoum’s property, leisure and telecoms holding company was the clear winner of the Best Middle East/North African Borrower award and it’s not hard to see why.

Dubai Holding’s January debut in the international bond markets was nothing short of sparkling.

Its triple tranche $2.46bn equivalent issue was showered with $13bn of orders, ensuring that each of the three tranches — a $500m five year, a Eu750m seven year and a £500m 10 year — was more than five times oversubscribed and priced at the tight end of revised guidance. HSBC and JP Morgan were leads.

The deal’s size, complexity and ambition was unprecedented in the region. "This deal is unique," said Andrew Dell, head of emerging markets origination at HSBC in London. "To have three benchmark transactions of different maturities, different currencies and different formats in terms of fixed and floating rate is very ambitious."

Of the almost 270 accounts that were allocated bonds, only 6% were from the Middle East — it was the first time a Middle Eastern deal had achieved such broad distribution outside the region.

Despite having been deluged with orders, the borrower also showed uncommon restraint in not printing an oversized deal. Investors were rewarded with an issue that performed well in the secondary market.

"We are a daring company from a daring country," said Fadel Al Ali, chief financial and operating officer of Dubai Holding. "But we are also a responsible company. Although the MTN programme is $5bn, we were consistent in taking from the market only what we needed. The $2.5bn deal will refinance existing debt."

Egypt’s E£6bn dazzler

In July, the Arab Republic of Egypt celebrated a dazzling return to the capital markets after a six year absence with a E£6bn five year deal, led by bookrunners JP Morgan and UBS, that has won Best EEMEA Sovereign Bond Deal. The deal’s aim was to provide a benchmark for Egypt’s corporate borrowers.

Egypt was originally considering a 10 year maturity but after gauging investor interest and amid turmoil in the markets, decided instead to print a five year issue. The deal attracted E£12bn of demand, allowing the leads to increase the size from the planned E£5bn to E£6bn. Youssef Boutros Ghali, Egypt’s finance minister said: "We decided to issue the Egyptian pound-linked deal to test the market’s confidence in our economic reform programme and the response was overwhelming. Investors clearly think we’re on the right track."

Other deals that scored highly included Ghana’s $750m 10 year debut — a trail-blazing issue for sub-Saharan African borrowers. Gabon followed in December and Kenya and Zambia are tipped to join the club in 2008.

22 Feb 2008