January 22, 2025 10:12 GMT
EM CEEMEA CREDIT: PIFKSA: new issue deal USD 5Y and 9.5Y dual tranche
EM CEEMEA CREDIT
Gaci Investment Co. (PIFKSA; Aa3/-/A+)
New issue deal: USD benchmark 5Y and 9.5Y dual tranche
IPT 5Y@ T+125bp area FV @ T+100bp
IPT 9.5Y @ T+140bp area FV @ T+115bp
- We look at the FVs using the interpolated theoretical curve as well as select seasoned bonds.
- We see the proposed 5Y deal theoretical value @ z+124bp. With the seasoned benchmark PIFKSA 4.75 Feb30 charting through the curve @ z+118bp, we expect to see little, if any, NIP to theoretical, indicating FV @ z+130bp region, or T+100bp.
- We see the proposed 9.5Y deal theoretical curve value @ z+142bp. We see the curve as too flat in this part of the term structure. Hence, we prefer to lean on the seasoned bonds for interpolation, using PIFKSA 5.25 Jan34 @ z+147bp and PIFKSA 4.875 Feb35 @ z+156bp. We derive FV @ z+158bp, or T+115bp allowing some 5-6bp for NIP.
- Moody’s upgraded GRIs in Saudi Arabia to Aa3, stable outlook at the end of November ‘24. This did not come as a surprise, rather it directly followed the recent upgrade of KSA sovereign rating.
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