CEEMEA OPEN: Packed pipeline; two sovereigns

• The short-end in cash USTs are richer, but there is modest cheapening further along the curve. The 5-year yield is up 1bp to 4.391%. The 10-year yield is flat around 4.5464% and just 1bp under yesterday's (5-day) peak and 1bp over the 50-day MA average. The 30-year yield trades just a touch under yesterday's peak.

• US president Trump said that he will impose tariffs ("of 25% and higher") on automobile, semiconductor, and pharmaceutical imports, with an announcement possibly coming by 2 Apr. This would be in addition to tariffs on steel and aluminium that are expected to kick in around March.

• On monetary policy, San Fran Fred Pres Daly said that monetary policy "needs to remain restrictive until, from my vantage point, until I see that we are really continuing to make progress on inflation". She said that there was no reason to be "discouraged" about the Jan CPI report, saying that "it just is going to take longer than anyone wants."

• EGB debt futures are softer. Mar25 Bunds and OATs are down 16-21 ticks.

• US equity future markets all point north. European equity futures are mixed. FTSE lags. Asia cash equities are down, CSI the exception (+0.60%).

• Brent has ticked higher overnight, now at a higher-high of $76.09/brl - it's strongest level since February 12th. America and Russia held their first direct talks in three years in Saudi Arabia, discussing the war in Ukraine for four hours. Ukraine’s President, Zelensky, was not invited. Later, Trump criticized Zelensky as “grossly incompetent,” blamed him for prolonging the war, questioned the use of aid funds, and suggested Ukraine hold elections.

• Overnight, gold traded just short of the record high seen on February 11th at around 2924 before pulling back a touch.

Fresh in the CEEMEA Pipeline

On the Radar

• Damac Real Estate Development Limited(“DAMAC”), rated Ba2 by Moody’s with a positive outlook and BB by S&P with a stable outlook, a leading developer of high-end properties in the Middle East, has now gone live at the 7.5% area IPTs on a USD-denominated 3.5yr benchmark Reg S senior unsecured Sukuk offering.
  • Damac has mandated Emirates NBD Capital, HSBC and J.P. Morgan as Joint Global Coordinators and Joint Bookrunners, with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Goldman Sachs International, Mashreq and Warba Bank as Joint Bookrunners.
  • A link to deal roadshow can be found here.
  • Damac was last in the market in October 2023 (Alpha Star Holding VIII Limited) USD300mn 3.5yr Sukuk at 8.375%. in from the 8.5% area IPTs.
  • Leads have circulated the following comps:
  • Issuer Rating Sukuk Coupon Size Maturity Spread Years to Mat Bid-Yield Price
  • DAMACR Ba2/BB/- Sukuk 8.375% $600 Apr-27 +252 2.1 6.779% 103.13
  • ARADAD B1/-/BB- Sukuk 8.125% $500 Jun-27 +246 2.3 6.721% 102.93
  • ARADAD B1/-/BB- Sukuk 8.000% $550 Jun-29 +285 4.4 7.158% 103.08
  • DARALA B1/-/- Sukuk 6.875% $400 Feb-27 +253 2.0 6.790% 100.16
  • DARALA B1/-/- Sukuk 8.000% $600 Feb-29 +281 4.0 7.113% 103.05

• Sharjah Islamic Bank PJSC, one of the leading Islamic banks in the UAE, rated A- by S&P and BBB+ by Fitch (both with a stable outlook), is out with a USD-denominated Reg S only 5yr bmk fixed rate senior unsecured Sukuk at the T+125bps area IPTs.
  • SIB has mandated Emirates NBD Capital, HSBC and Standard Chartered Bank as Joint Global Coordinators, and alongside, Abu Dhabi Islamic Bank, Ajman Bank, Bank ABC, Dubai Islamic Bank, Mashreq, The Islamic Corporation for the Development of the Private Sector and Warba Bank, together, as Joint Lead Managers and Joint Bookrunners
  • A link to the deal roadshow can be found here.
  • SIB was last in the markets back in June 2024, where it priced a USD500mn 5yr Sukuk at T+105bps, in from the T+140bps area IPTs. The deal attracted over USD1.2bn in final demand.
  • Leads have circulated the following leads:

• The Republic of Uzbekistan, (represented by the Ministry of Economy and Finance of the Republic of Uzbekistan), rated Ba3 (Moody’s) / BB- (S&P) / BB- (Fitch) (all stable outlooks) has launched a EUR/USD dual-tranche Reg S senior unsecured note in the following format:
  • EUR500mn 4yr (Feb-2029) at 5.10%, in from the 5.25% area guidance and 5.500% area IPTs. So far, books have attracted over EUR1.15bn in demand excluding JLM interest.
  • USD500mn (May-2032) at 6.95%, in from the 7.125% area guidance and 7.375% area. So far, books have topped USD1bn, excluding JLM interest.
  • Uzbekistan has mandated Citi, J.P. Morgan (B&D), MUFG, Societe Generale and Standard Chartered Bank as JLMs & Joint Books, National Bank for Foreign Economic Activity of the Republic of Uzbekistan, Uzpromstroybank as Co-managers and Citi (for EUR tranche) as Sustainability Structuring Bank.
  • The issuer was last in the market in May 2024, where it priced a triple-tranche Reg S senior unsecured notes consisting of USD (600mn), EUR (600mn) and UZS (3tr).

• The Arab Energy Fund,a Multilateral Impact Financial Institution (rebranded from Arab Petroleum Investments Corporation "APICORP") rated Aa2 (stable outlook) by Moody's, AA- (stable outlook) by S&P, and AA+ (stable outlook) by Fitch, is now out at the SOFR m/s+ 90bps area IPTs on its USD-denominated Reg S 5yr offering.
  • TAEF has mandated Nomura, BSF Capital, Mashreq and Standard Chartered Bank as Joint Lead Managers
  • A link to the net roadshow can be found here.
  • TAEF was last in the markets in April 2024, where it landed a USD750mn Sen Unsec note at m/s +95bps.

• QNB Finance Ltd has now landed a USD700mn 5yr (March-2030) Reg S Senior Unsecured Cat 2 note at SOFT+105bps, in line with FPG: SOFT+105bps. The guarantor is Qatar National Bank.

• Emirates NBD Bank PJSC, rated A2 (positive) by Moody’s and A+ (stable) by Fitch, the second largest bank in the UAE (by total assets, deposits and loans) and 55.76% indirectly owned by the Government of Dubai, has now priced its USD1bn Reg S PNC6 AT1 capital issuance at 6.25%, in from the 6.75% area IPTs on the back of USD2.5bn in demand (excluding JLM interest).

• The Slovak Republic, rated A3 (Stable) by Moody's, A+ (Stable) by S&P, A- (Stable) by Fitch, acting through the Ministry of Finance and represented by the Debt and Liquidity Management Agency (ARDAL), is advertising a EUR Reg S 15yr (Feb-2040) offering.
  • Slovak Republic has mandated HSBC, J.P. Morgan, Slovenska sporitelna (Erste Group) and Tatra banka (RBI Group) as Joint Lead Managers and Joint Bookrunners.
  • The issuer was last in the markets in October 2024, where it priced a EUR2bn 7yr bond at m/s+90bps.

• Saudi Real Estate Refinance Company, rated A1 (Stable) by Moody’s, A- (positive) by S&P and A+ (Stable) by Fitch, the primary provider of housing refinancing solutions, wholly-owned by the Public Investment Fund of Saudi Arabia, has arranged a pre-recorded global investor call along with a series of fixed income investor meetings, physically in London as well as virtually, that commenced earlier this week (February 17^th). This, to advertise a USD-denominated Reg S senior Sukuk offering consisting of 3- and 10-year tranches.
  • SRC has mandated HSBC and J.P. Morgan as Joint Global Coordinators and Al Rajhi Capital, GIB Capital, SNB Capital, The Islamic Corporation for the Development of the Private Sector, Société Générale, and Standard Chartered Bank are appointed as Joint Bookrunners and Joint Lead Managers.

• Anadolubank A.Ş., rated B (positive) by Fitch, an SME-focused bank operating in Türkiye and Europe and owned by the HABAŞ Group, will be available for a series of one-on-one fixed income investor calls, as it advertises its upcoming debut USD-denominated Reg S only 10NC5 T2 bond issuance.
  • Anadolubank has Goldman Sachs International as a Sole Bookrunner.

Priced Deals

What to watch on Wednesday

• In CEEMEA, Polish consumer confidence (9GMT), South African retail sales (11GMT) and Russian PPI (16GMT).

• In the US, housing starts (13.30GMT) are seen rising to 1390k from 1499k. Building permits f/c t 1460k in January from 1482k. The NY Fed services business activity is also due. Focus, however, will be on the FOMC meeting minutes (19GMT), which may provide more information on thoughts from the CB, although there has been a lot of talk since the January gathering.

• Central bank speakers to talk include the Fed's Jefferson (22GMT) and the ECB's Panetta.

Wider market Sentiment

• USD Index at 106.91
• UST 2yr/10yr at 4.299%/4.546%
• Bund 2yr/10yr at 2.123%/2.492%
• Brent at $76.21/brl

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