Morning Commentary: EM primary eyes long-dated bond offerings from Jordan, Mexico

By Rebecca Melvin

New York, Oct. 2 – Emerging markets opened Monday with a couple of new issue launches as well as a number of deals on roadshows that were in focus, market sources said.

Jordan’s planned $1 billion of 30-year senior bonds were expected to price to yield 7½% later Monday.

The Jordan 2047 notes were seen having fair value in the 7.3% to 7.4% area given a Z-spread at 475 basis points to 485 bps, according to MUFG credit strategist Trieu Pham.

The estimate was based on comparisons of similarly rated credits such as Bahrain and Egypt and with additional spread added between the 10 year and 30 year bond ranges of between 90 bps and 110 bps, Pham wrote in a note.

Demand for the new Jordan paper brought $4.3 billion in orders.

Meanwhile, a deal size was not yet announced on Mexico’s dollar-denominated benchmark offering of 30-year bonds, but proceeds of the issue are going to repay the government’s $1.88 billion outstanding of 5 1/8% global notes due 2020.

Deals on the road include Aegea Saneamento’s up to $400 million of seven-year notes, which remain on a roadshow through Monday.

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