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Orders Top $1B For Bahrain Mumtalakat Bond Debut

According to the Wall Street Journal, “Offers for Bahrain Mumtalakat Holding Co.’s first-ever bond issue are in the range of $1 billion to $1.25 billion, according to a source familiar with the sale.

That means the sovereign wealth entity’s debut could be larger than the minimum $500 million benchmark size when it completes on Wednesday. Deutsche Bank, HSBC, JPMorgan and Standard Chartered are leading the sale.

The five-year senior unsecured bonds, rated A by Standard & Poor’s and A from Fitch Ratings, are expected to yield 300 basis points over mid-swaps. Proceeds will be used for general corporate purposes, including to refinance existing debt.

The Kingdom of Bahrain, which owns Mumtalakat outright, issued $1.25 billion in 5.5% bonds on March 24 via JPMorgan, Deutsche Bank and BNP Paribas, according to Dealogic.  In a note on June 21, Standard & Poor’s said there is an “almost certain likelihood that the government of Bahrain would provide timely and sufficient extraordinary support to Mumtalakat in the event of financial distress,” although it does not formally guarantee its liabilities.

Mumtalakat does not make material investment decisions without government consent, S&P added. Most of the company’s assets are in domestic real-estate, telecommunications, aviation, banking and manufacturing. Bahrain owns a separate holding company for oil and gas assets, the National Oil and Gas Authority.  The issuer’s decision to tap the capital markets for the first time was predicated on the Mumtalakat’s need to become more independent from Bahrain, said the source.

“In the wake of the Dubai World issues, Bahrain is trying to push these sovereign entities away from its balance sheet and would like them to fund themselves on their own,” the person said.”

Source: Wall Street Journal

SouthGobi’s CEO Arrested, CIC Struggles with Investment

The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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bcIMC Buys into Bottling Business with PAI in €1.623 Billion Takeover of Refresco

Dutch soft-drink bottler Refresco Group N.V. has agreed to a buyout offer for all 81.2 million of its shares from French private equity firm PAI Partners SAS (PAI) and Canadian pension manager British Columbia Investment Management Corporation (bcIMC) in exchange for €20 in cash per ordinary share for a total consideration of €1.623 billion. Refresco’s major shareholders, which includes 3i Group, and shareholding members of its boards, who represent 26.5% of outstanding shares, have said they stand behind the deal.

Refresco’s board rejected an initial offer from PAI in April 2017 of €1.4 billion, which they felt did not adequately capture the value added by their plans to bolster its presence in North America through the acquisition of Canadian bottler Cott TB, a deal that went through in July for US$ 1.25 billion.

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