Slovenia prices €1.25 billion tap; Paraguay eyes deal; investors rattled by tariff plan

By Rebecca Melvin

New York, March 1 – Slovenia priced €1.25 billion of additional notes to three existing issues including its most recently priced 10-year note that came in January. Pricing on the tap of the 1% notes due 2028 came with a little wider spread of mid-swaps plus 25 basis points, compared to mid-swaps plus 17 bps when the original deal priced almost two months ago.

The sovereign priced an additional €850 million of these notes, according to a syndicate source on Thursday, as well as €250 million of 1˝% notes due 2035 and €150 million of its 3 1/8% notes due 2045, at mid-swaps plus 45 bps and mid-swaps plus 55 bps respectively.

Also in the primary market, Russia’s PJSC Gazprom priced CHF 750 million five-year loan participation notes at par to yield 1.45%. Proceeds of the Regulation S deal will be used for general corporate purposes.

In Asia, Agile Group Holdings Ltd. priced an upsized $400 million of guaranteed senior perpetual capital securities at par with an initial interest rate of 6 7/8%. The Regulation S deal was initially announced at $300 million in size and was increased later in the day by $100 million.

The securities will be callable on March 7, 2023 and every five years after that.

The forward calendar grew by two Middle East region issuers including the government of the Emirate of Sharjah, which is planning a dollar-denominated benchmark offering of senior unsecured single- or dual-tranche sukuk. The Regulation S notes will have maturities of five, seven or 10 years.

Also Oman’s BankMuscat announced plans to price a dollar-denominated benchmark note under its euro medium-term note program. Size and maturity of the Regulation S offering are subject to market conditions.

Both deals will begin to roadshow on March 4.

Across the pond, the Latin American region was mostly quiet again. But Paraguay announced a roadshow with a potential dollar-denominated benchmark transaction, according to a New York-based source.

“Paraguay is the name taking us out of the doldrums,” a New York-based market source said.

The sovereign named Citigroup and J.P. Morgan as joint bookrunners to arrange a series of fixed-income meetings beginning on March 6.

The Latin America region primary dollar market has been quiet for the last two weeks as market volatility and corporate quiet periods ahead of fourth-quarter earnings reports hushed the region.

But on Thursday afternoon, all eyes were on President Donald Trump’s controversial plan to impose steep global tariffs on aluminum and steel.

Trump announced his intention to impose a 25% tariff on steel imports and a 10% tariff on aluminum imports, in a bid to level the trade playing field as well as strengthen U.S. industries deemed integral to national security.

The move comes on the heels of studies by the Commerce Department that found imports of metals had compromised the country’s ability to make its own weaponry. The plan was met with harsh criticism on a number of fronts including many U.S. manufacturers and trade partners including Japan and the European Union. But it was praised by congressional Democrats and labor unions.

Tariffs could be a stumbling block to economic growth if companies face higher prices for materials they need to manufacture goods and a likely backlash from trading partners overseas. Financial markets were rattled by the news with both U.S. stocks and Treasury yields taking a tumble.

The Dow Jones industrial average fell more than 400 points on Thursday, marking its third consecutive loss, and erasing gains for the year. It closed at 34,608.98, which was down 420.22 points, or 1.7%, on the day.

The S&P 500 stock index lost 36.16 points, or 1.3%, to 2,677.67, and the Nasdaq Stock Market dropped 93.45 points, or 1.3%, to 7,180.56.

The yield on the U.S. Treasury 10-year benchmark dropped to 2.802% on Thursday from 2.8.70% on Wednesday. The move lower had started before the tariffs announcement, after Federal Reserve Chairman Jerome Powell told the U.S. Senate Banking Committee that he did not see decisive evidence that steady declines in unemployment and less slack in the labor market had led to breakout wage gains. His outlook was tempered from comments made on Tuesday on Capitol Hill when he emphasized an outlook for swifter inflation.

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