EM primary poised to slow; Croatia trades up; Nigeria on tap; ISDA decides on Venezuela

By Rebecca Melvin

New York, Nov. 17 – The pipeline for the Central & Eastern Europe, Middle East and Africa region was shaping up to be pretty quiet next week ahead of the U.S. Thanksgiving holiday, market sources said.

But Nigeria was expected to bring a deal, subject to market conditions, on Monday following a roadshow that was wrapping up on Friday for 10-year and 30-year dollar-denominated eurobonds.

Also Mexican lender Credito Real SAB de CV Sofom ER was on the calendar for a $230 million offering of subordinated perpetual notes.

Meanwhile, the primary remained active on Thursday and Friday. Croatia’s newly priced 2¾% notes due Jan. 27, 2030 were “trading up nicely” on Friday after the sovereign priced €1,275,000,000 of the long 12-year paper to yield mid-swaps plus 190 basis points, a London-based market source said.

The new Croatia bonds were seen at 99.05 bid, 99.45 offered, which was up from the reoffer of 97.943.

In Latin America, the city of Buenos Aires priced $403 million equivalent of Argentine peso-denominated floating-rate notes at par to yield 29% initially late Thursday.

The first two coupons will be fixed and then shift to Badlar plus 375 bps for the 2028 paper. The notes will be denominated in Argentine pesos but will be subscribed and payable in dollars at the specified exchange rate.

Investors of Venezuela and Petroleos de Venezuela SA may have credit default insurance pay out after the Americas credit derivatives determinations committee of the International Swaps and Derivatives Association decided that there was a failure to pay credit event in respect to both issuers. The meeting regarding Venezuela will reconvene on Monday to continue the discussion about an auction, according to a notice posted by the ISDA website.

Holders have thus far been patient regarding payments from the cash-strapped sovereign and its state-owned oil company, and that patience has been rewarded as some payments have been made after the 30-day grace period. Market reaction to the ISDA decisions was expected to be muted because of this, and the view that investors have is that Venezuela is still willing to pay.

In the broader markets, U.S. government bonds were up, retracing losses notched in a modest selloff on Thursday.

The yield on the benchmark 10-year Treasury note settled at 2.352%, compared with 2.361% Thursday and 2.397% last Friday.

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