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Risk-on, as cash moves toward EM debt asset class; Brazilian Development preps green bond
By Paul A. Harris
Portland, Ore., April 28 – Drooping oil prices and treacherous political headlines appear unable to spoil the present appetite for risk, sources say.
Dedicated emerging markets bond funds have seen 17 consecutive weeks of inflows totaling $32 billion, year-to-date, a London-based trader said.
News earlier in the week that Turkish president Recep Tayyip Erdogan’s government arrested more than 1,000 people in its latest crackdown related to last year’s failed coup scarcely caused a ripple, the trader said.
Meanwhile the new issue market, which was generally quiet on Friday, ought to ramp up in the week ahead, sources say.
Look for deal announcements in the early part of the week, a trader said.
Brazil’s Brazilian Development Bank is expected to show up with a benchmark dollar-denominated green bond.
Also, Saudi Arabian water and power project developer ACWA Power is expected to revive a $600 million perpetual to fund project financing.
Appetite for MHP notes
Any misgivings about political risks in the Ukraine failed to spoil a robust appetite for Ukrainian poultry producer MHP SA’s new 7¾% notes due 2024 (B/B-), a trader said.
The new 7¾% notes, which priced at par in a $500 million issue, came 400 basis points inside of the sovereign and were 101½ bid, 101.85 offered late Friday, the source added.
Heading toward the close, the book was four-times deal size, then ultimately settled to around $1.7 billion at the 7¾% final price, the source added.
ING and JPMorgan were the joint bookrunners.
Ukrainian corporates seem to have routed the chickens elsewhere, the trader said.
Ukraine agribusiness Kernel Holding SA’s 8¾% notes due Jan. 31, 2022, which came in a $500 million issue that priced at 99.504 to yield 8 7/8% in January, were trading with a 7.15% yield on Friday.
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