Morning Commentary: Emerging primary markets busy; Iraq set to price $1 billion; Colombia on tap

By Rebecca Melvin

New York, Aug. 2 – The emerging primary markets were active early Wednesday with the Republic of Iraq talking its $1 billion 5.5-year notes in the area of 7% for pricing later in the day, the Republic of Colombia announcing a tap of its 3 7/8% notes due 2027 and a $1.25 billion new green bond issue by Asian Development Bank.

Final terms of the Rule 144A and Regulation S Iraq notes were thought to show a lower yield in the mid- to high-6% range, according to MUFG credit analyst Trieu Pham.

Pham’s call was based on technical support and an announcement by the International Monetary Fund on its completion of the second review of the Stand-By Arrangement (SBA), providing another $825 million in facilities.

A lower yield was also reflected by the Iraq 5.8% notes due 2028, which have traded up to 93 bid, 94 offered, for a yield of 7.2% bid, 7% offered, which is higher on the week, Pham wrote in a note published Wednesday.

Citigroup, Deutsche Bank and JPMorgan are the joint bookrunners of the Iraq issue, with Trade Bank of Iraq acting as a co-manager.

Colombia plans to tap its 3 7/8% global bonds due 2027, according to a filing from the sovereign.

The bonds will form a single series with the outstanding $1 billion of 3 7/8% global bonds that were issued this year on Jan. 25.

BofA Merrill Lynch, Deutsche Bank Securities and HSBC are joint bookrunners for the Securities and Exchange Commission-registered deal.

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