Montenegro, Kuwait Projects sell notes; some Lat-Am spreads narrow, prices mixed; Koc ahead

By Christine Van Dusen

Atlanta, March 8 – Montenegro and Kuwait Projects Co. sold notes on a Tuesday that saw Latin American debt trade well as emerging markets assets distanced themselves from weakness in commodities and equities.

“Busy day, in terms of economic releases, with Asian markets driven by weak China export data,” a London-based strategist said. “Most of the attention has been grabbed by the EU-Turkey summit in Brussels yesterday.”

Flows for emerging markets debt were two-way and “constructive,” with some profit-taking, a trader said.

And some spreads tightened, particularly in Latin America, where Brazil’s five-year credit default swaps spreads closed at 408 basis points from 410 bps and Mexico’s finished almost unchanged at 177 bps.

“Cash prices finish mixed, with some curves markedly higher, whereas others are mostly unchanged from yesterday,” a New York-based trader said.

Meanwhile, Saudi Arabia was reportedly seeking a syndicated loan of up to $10 billion to fund its budget deficit, the strategist said.

The sovereign “will likely offer the largest lenders the opportunity to participate in the potential launch of a sovereign bond,” he said. “The kingdom started to tap local bond markets last year.”

Investors were looking ahead to the new Rule 144A and Regulation S issue from Turkey’s Koc Holding AS.

The Istanbul-based industrial conglomerate is expected to print a benchmark-sized issue of dollar-denominated notes due in seven years as soon as Wednesday, a trader said.

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