Equate may expand US dollar debt issue

Kuwait’s Equate Petrochemical is considering expanding its imminent US dollar debt issue to include a 30-year bond, according to a document from the lead arrangers, following the success of Saudi Arabia’s offering.
Equate is expected to sell five-year and 10-year US dollar-denominated debt on Thursday.
A source familiar with the matter said the petrochemical company had been encouraged by strong US investor appetite for the 30-year tranche of Saudi Arabia’s mammoth $17.5 billion bond issue last Thursday.
Initial guidance for Equate’s five-year paper was set at the low end of 200s basis points over midswaps, while price guidance for the 10-year tranche was in the high 200s to 300 basis points over midswaps, according to the document from the lead arrangers seen by Reuters on Wednesday.
Both portions of the bond — which is structured to allow investors from the United States to buy the paper — will be of benchmark size, traditionally understood to mean upwards of $500 million.
Consideration of a 30-year tranche was acknowledged by arranging banks in the document.
They have received requests from potential investors to add a 30-year paper to their offering, to which they would then subscribe, a process known as reverse enquiries, the source said.
Saudi Arabia raised $6.5 billion from the 30-year paper in its record-breaking debut Eurobond. Most of the demand for the longest-dated tranche, or 44 percent, came from American investors, according to official data.
Equate might end up tapping the same US investor base, given their desire for such paper from Gulf issuers. 
Dow Chemical is one of the company’s main shareholders and that would also add allure for American accounts, the source said.
The company’s other main shareholder is Kuwait’s Petrochemical Industries Company (PIC), a subsidiary of state oil firm Kuwait Petroleum Corporation.
Citi, HSBC, JP Morgan, and NBK Capital are the joint lead managers and they are bookrunners together with Banca IMI, Mizuho Securities, MUFG, and SMBC Nikko, the document showed.

Source: Arab News