Kenya plans new tranches; Latin America quieted by Carnival; tone remains constructive

By Rebecca Melvin

New York, Feb. 12 – Emerging markets put in a fairly quiet Monday as global stock markets popped higher amid ongoing volatility. The major U.S. stock indexes were up as well and have erased some of their drop of the last two weeks but still remain lower for the year.

In Asia, Export-Import Bank of Korea (Kexim) sold CHF 350 million 0.253% five-year bonds at par on Monday, a market source said. The Seoul, South Korean bank is pricing the Regulation S notes via bookrunner UBS.

Meanwhile, Ronshine China Holdings Ltd. said it plans to tap its recently priced 8¼% senior notes due 2021, subject to market conditions.

The original $325 million of 8¼% notes priced Jan. 25 at a reoffered 98.066 to yield 9%.

The Fuzhou, China-based property developer plans to use proceeds to refinance some of its existing debt.

In the Middle East and Africa region, Kenya’s existing international notes traded mixed in the early going on Monday after the sovereign announced a roadshow for new 10-year and 30-year eurobonds.

The Kenya 2019 notes were trading at 103 to 103¾, and the spread tightened by 15 basis points, but the longer-dated 2024 notes were trading with a wider spread at 102 to 103. The spread was about 10 bps wider, according to a London-based market source.

Citigroup, JPMorgan, Standard Bank and Standard Chartered are managing meetings to market the new eurobonds beginning on Tuesday and wrapping up Feb. 19.

The Latin America region was especially quiet as many countries began Carnival holidays on Monday.

There were no new issues announced, but the tone remains constructive, a New York-based market source said.

“Many countries are out on holidays for Carnival so it is a bit quiet,” the source said. Later in the week, market players will be watching inflation data, which help influence where markets move from here, the source said. But overall the tone is constructive.

Argentina was outperforming the rest of the high-beta space following its recent pullback. Other names were also performing well, the source said.

Brazil’s Petroleo Brasileiro SA paper was a bit stronger follow losses logged on Thursday and Friday.

The Petrobras 8¾% notes due 2025 were seen around 116½ bid, 117 offered, which was up from 115 on Friday. The bond was trading initially on Thursday in the 117½ to 119¼ range, according to Trace data.

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