Issues from Egypt, Latam Airlines on volatile day for EM; China’s Bluestar re-prices deal

By Christine Van Dusen

Atlanta, June 4 – Egypt and Chile’s Latam Airlines Group SA sold notes – and China National Bluestar Group Co. Ltd. re-priced an earlier deal – on Thursday as emerging markets assets traded at the mercy of U.S. Treasury moves.

The morning’s Treasury moves were, for investors, “a little painful,” a London-based trader said. “But what’s very impressive for an asset class that sometimes has been known to throw in the towel at the first sign of pressure is the lack of panic selling. This makes me think the ‘buy the dip’ mantra is still being chanted.”

Asian bonds closed their session firm, with high-grade cash notes finishing unchanged to a couple of basis points tighter, another London-based trader said.

“New issues performed well on the back of real-money buying,” he said. “Names remain in demand, but some accounts are hesitant to pick them up, given how tight spreads are.”

Financial company bonds were weaker on Thursday, he said.

“In Korea, the 10-year bucket was 2 bps to 4 bps tighter,” he said. “India closed broadly unchanged.”

India-based Bharti Airtel Ltd.’s new 4.37% notes due 2025 traded between 211 bps and 204 bps, then hit 208 bps before closing at 209 bps bid, 206 bps offered.

From Latin America, most bonds saw wider spreads and a risk-off tone amid volatility, a New York-based trader said, and high-yield was particularly weak.

© 2015 Prospect News.
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