Turk Telkom plans to price new dollar note; new Uzbekistan notes slip; new Turkey sukuk

By Rebecca Melvin

New York, Feb. 14 – Just as this week’s calendar of new issues for the Central & Eastern Europe region cleared on Thursday, another emerging market announcement hit the tape. The four new issues that already priced met with mixed market receptions.

Turk Telekomunikasyon AS announced that it plans to sell a U.S. dollar-denominated note under Rule 144A and Regulation S.

Roadshow meetings were slated to get underway on Friday and wrap up next Wednesday after stops in London, Boston and New York. BofA Merrill Lynch, Citigroup Global Markets, ING Bank NV, MUFG Securities EMEA plc and Societe Generale CIB are joint bookrunners of the deal.

The issuer is an Ankara, Turkey-based telecommunications company.

Elsewhere, Uzbekistan’s newly priced global bonds traded down in the early market Thursday after $1 billion of the notes priced at par in two tranches due 2024 and 2029.

Both the $500 million Uzbekistan 4¾% notes due 2024 and its $500 million tranche of 5 3/8% 2029 notes traded down to 99.38 bid, according to a market source.

The notes traded down ½ point, a London-based market source confirmed, adding that it was “not surprising after they moved pricing down 60 basis points.”

The Republic of Turkey’s new $2 billion three-year Islamic bond, or sukuk, went “very, very well,” the London source said, noting that the order book for the deal –Turkey’s third benchmark-sized global bond issue for the year to date –topped $5 billion and the new issue premium was just 10 bps.

The sukuk came with a 5.8% profit rate and a yield spread of 318.4 bps over mid-swaps, which was tight to talk for a profit rate in the 5.9% area.

Meanwhile, Latvia’s newly priced 1 7/8% 30-year notes traded up slightly to 99 after that issue priced at 98.77, and the recently priced Credit Bank of Moscow paper was wrapped around reoffer on Thursday.

The Credit Bank of Moscow priced €500 million of 5.15% five-year loan participation notes at a spread of 502.5 bps over mid-swaps on Tuesday.

Emerging markets debt overall was firm on Thursday, maintaining the same kind of steady to higher tone of the last few sessions when market sentiment and performance tilted toward the upside amid optimism regarding the U.S.-China trade agreement negotiations and China stimulus, Tai Hui, JPMorgan Asset Management’s chief Asia market strategist, said in a recent interview with Bloomberg.

For the next three to six months, Hui looks for risk appetite to remain robust and holdings of emerging markets fixed income at the right spreads is a good bet. But at some stage, Hui said, there will likely be a switch to more cautious holdings as global growth slows.

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