Alternatifbank bond offers pick-up to parent CBQ

July 16, 2014 - 9:35:01 am

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)