EM weakens on Deutsche Bank news; Latvia eyes notes; Banorte, Liverpool, Ultrapar sell notes

By Christine Van Dusen

Atlanta, Sept. 30 – Emerging markets assets struggled on Friday, with the new notes from South Africa suffering, on negative news about Deutsche Bank.

“We’re off to a weaker start into the day as concerns on Deutsche Bank are mounting after a dozen hedge funds announced that they have moved some of their exposure out of the German lender,” a London-based analyst said. “Its stock has tumbled by 17% since mid-September, when it emerged that the bank might have to pay as much as $14 billion to settle an investigation on the sale of residential mortgage-backed securities.”

On this weaker sentiment, U.S. Treasuries retreated and oil prices gave up some of their gains, he said.

“EM currencies and credit are also starting on the weaker foot,” he said.

Indeed, the new issue of notes from South Africa was “feeling the pinch,” he said.

The sovereign on Thursday priced a $3 billion issue of notes due Oct. 12, 2028 and 2046, according to an informed source.

In deal-related news, Latvia is planning to issue euro-denominated notes due in 10 years, according to an announcement from the sovereign.

On Thursday, Brazil-based Ultrapar Participacoes SA sold $750 million 5¼% notes due Oct. 6, 2026. Mexico’s El Puerto de Liverpool SAB de CV priced $750 million 3 7/8% notes due Oct. 6, 2026. And Mexico’s Banco Mercantil del Norte SA (Banorte) priced $500 million 5¾% notes due Oct. 4, 2031.

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