Emerging markets eye Middle East crisis; LatAm ends week on a down beat; Ivory Coast prices

By Rebecca Melvin

New York, June 9 – The political crisis between Qatar and more than a half dozen Middle Eastern nations was a focus of emerging markets this past week, causing debt prices in the region to gyrate.

Qatari sovereign bonds widened over the week, with the spread on shorter-dated issues widening by 40 basis points to 70 bps, while longer-dated maturities pushed out by 15 bps to 20 bps, according to a credit strategy note published Thursday by MUFG Securities analyst Trieu Pham.

The Qatar debt levels were deemed fair in the context of the Gulf Cooperation Council, with the Qatar 3¼% notes due 2026 trading about 3 bps wide compared to Saudi Arabia’s 3¼% notes due 2026 and 20 bps wide compared to Kuwait’s 3½% notes due 2027, Pham wrote.

The primary markets were mostly quiet on Friday. But the Republic of Cote D’Ivoire priced two benchmark issues of unsecured notes (Ba3//B+), including a $1.25 billion issue of 6 1/8% amortizing notes due 2033 that priced at 98.747 to yield 6¼%, and slipped another ½ point below issue price after the break.

Back in the secondary market, Latin America sovereign and corporate debt closed weaker on Friday, although off the lows for the week, with corporate debt underperforming, a New York-based trader said.

Paul A. Harris contributed to this story.

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