Poland prints first sovereign green bond; oil prices give EM names a boost; Turkey weaker

By Christine Van Dusen

Atlanta, Dec. 12 – Poland on Monday priced the first sovereign issue of green bonds amid higher oil prices that gave many emerging markets names a boost while investors awaited the Federal Open Market Committee meeting, set for Tuesday and Wednesday.

“While we see oil producers trading tighter this morning, the OPEC and non-OPEC deals also support the reflation trade initially triggered by Trump’s potential fiscal spending increases,” a London-based analyst said.

Saudi Arabia’s bonds, he said, were trading 5 basis points tighter than Friday’s levels.

The surge in oil prices also gave Bahrain, which suffered after a downgrade on Friday from S&P, a lift. The sovereign’s bonds opened 6 bps tighter on Monday, he said.

Oil also buoyed bonds from Ghana, which outperformed on Monday, trading about 15 bps to 20 bps tighter, he said.

But most of the improvement for Ghana’s paper came from the news that the opposition party won last week’s election.

Looking to Turkey, bonds opened weaker on Monday after releasing disappointing gross domestic product numbers for the last quarter.

“The quarter was undoubtedly under pressure after the July 15 coup attempt,” the analyst said. “Saturday’s tragic terrorist attack close to a football stadium in Istanbul is a further sign that Turkey continues to face heightened risks in its fight against terrorist groups.”

As the morning went on, Turkish bond yields came off the wides, “with Street offers pulling back,” a London-based trader said.

And near the end of the day, the bonds were “almost back to unchanged on spread, on Street and local buying,” he said.

Poland prices bonds

In its new deal, Poland priced €750 million 0.5% green bonds due Dec. 20, 2021 at 99.343 to yield mid-swaps plus 148 bps, an informed source said.

HSBC, JPMorgan and PKO BP were the bookrunners for the deal.

This is the first green bond issued by a sovereign.

The books were said to be €1.4 billion.

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