South Africa’s Eskom Holdings on tap; emerging markets mostly steady; Aruba sells bonds

By Rebecca Melvin

New York, July 31 – As July closed on a quiet note on Tuesday for emerging market bonds, market players were eyeing a proposed dollar bond issue from South Africa’s Eskom Holdings SOC Ltd., which could price as soon as Wednesday.

The Johannesburg-based state-run utility had talked about potentially two tranches, one guaranteed by the government and a second non-guaranteed tranche, both being sold under a $4 billion medium-term note program. According to market sources both tranches are expected for up to $1.5 billion total.

Barclays, JPMorgan, Standard Bank and ABSA Bank are bookrunners for the Rule 144A and Regulation S deal.

The emerging markets secondary was little changed in the early going, although some currencies were under pressure, including the Turkish lira, which crept back up to 4.91 to the U.S. dollar and was weaker after having improved for much of July.

The Indonesian rupiah was also slightly weaker, although the Argentine peso and Brazilian real were slightly stronger.

In the Latin America region, Aruba priced a $125 million private placement of 6˝% bonds due 2029 that priced at par for a yield spread of 355.1 basis points over 10-year Treasuries, according to a New York-based market source.

“It’s a good thing that they could get it priced, but it’s such a unique structure, a private placement, so it doesn’t tell you much,” the source said.

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