Lat-Am bonds mixed, default swaps tighter on holiday for region; CAF, Kexim advance deals

By Christine Van Dusen

Atlanta, Nov. 2 – Emerging markets bonds were mixed on Monday, even amid weakness for U.S. Treasuries, with Latin America mostly quiet on a holiday for the region.

Also on Monday, Turkey was in the news after Sunday's elections revealed that the ruling Justice and Development Party (AKP) had regained its parliamentary majority.

“Turkey is off the highs, with real-money selling into the rally, and the Street stopped chasing shorts,” a trader said on Monday.

Still, Turkey’s bonds were expected to continue outperforming similarly rated credits, such as South Africa, another trader said.

Financial and corporate issuers could become active in the primary market in the next few weeks, a trader said, in this “more supportive environment and before a potential rate hike by the Fed in December or 2016.”

In deal-related news, Venezuela's Corporacion Andina de Fomento (CAF) set initial talk at mid-swaps plus 80 bps to 85 bps for a euro-denominated offering of benchmark-sized notes due Nov. 10, 2020, a market source said.

The notes are expected to price on Tuesday.

CAF is a lender based in Caracas, Venezuela.

Korea Export-Import Bank (Kexim) set talk for a two-tranche offering of dollar-denominated notes due in 5˝ and 10 years, a market source said.

The 5˝-year notes were talked at a spread in the Treasuries plus 110 bps area.

The 10-year notes were talked at a spread in the Treasuries plus 130 bps area.

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