LONDON: Turkey's Alternatifbank appeared to be offering a 45-55 basis point pick-up to majority owner Commercial Bank of Qatar when it set guidance for a new five-year note on Tuesday.
The lender, rated A1/A-/A, set initial price thoughts of 160-170 bps over mid-swaps on a new Reg S only senior unsecured note with deal size expected to be $250 million.
The key for investors will be the pick-up on offer over parent company CBQ, which owns a 74.25 percent stake and is guaranteeing the deal, a source close to the transaction said.
CBQ recently issued a 2.875 percent, 2019 note that was trading at a Z-spread of 109 bps around the time of announcement.
A new five-year CBQ trade would price around Z+115 bps, suggesting that the pick-up on offer is around 45-55 bps,one rival banker said
"There are actually not that many owner-guaranteed deals in the region to compare it with. But I would suggest that pricing it around 30-40 bps back of the guarantor would be a fair level," he said.
"If they price at around 145-150 bps I think they would consider that a very good trade."
The deal is Wednesday's business via Bank of America Merrill Lynch and Commerzbank.
Alternatifbank had total assets of 10.25 billion lira ($4.8 billion) as of March 31, 2014. This figure makes it the 18th largest bank by assets in Turkey, the lender said in the deal's documentation.
The lender recently secured a $345 million one-year facility, marking a full renewal of a deal taken out the previous year.(Reuters)