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EM spreads wider but ‘holding OK’; Egypt improves; Turkey weaker; forward calendar grows
By Rebecca Melvin
New York, May 14 – Emerging markets debt spreads remained somewhat wide but were “holding OK” in quiet trading on Monday, a London-based trader said.
Egypt continued to firm on the back of an upgrade from S&P Global Ratings.
The Egypt 4¾% notes due 2026, which priced on April 9, were quoted at 97.62 bid, 98.62 offered on Monday, compared to 96¾ bid, 97¾ offered on Friday. Its sister tranche, the Egypt 5 5/8% notes due 2030, were quoted at 97¾ bid, 99 offered on Monday, compared to 96.62 bid, 97.62 offered on Friday.
On the flip side, Turkey’s credit remained weak. Turkey’s newer 6 1/8% notes due 2028, of which $2 billion priced in mid-April, fell to 95.452 on Monday, which was down another 0.8% on the day. The paper, which priced at a reoffered 99.427, is now down 4% from issue.
“The market backdrop for EM is not constructive – EM funds outflows, Argentina at the IMF, Iran sanctions, volatility in Turkish bonds, and Ramadan starting this week,” a second London-based market source said.
Despite the headwinds currently pressuring emerging markets, the market has seen a sprinkling of new deals join the forward calendar from across various regions in the last couple of days.
On Monday, Israel Chemicals Ltd., African Export-Import Bank and Asian Development Bank joined the forward deal calendar.
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