Morning Commentary: Positive tone lifts Argentina’s bonds; Cyprus joins deal calendar

By Rebecca Melvin

New York, Sept. 17 – Argentina’s bonds were better early Monday as investors eyed an upcoming Lebac auction and anticipated further support from the International Monetary Fund to be forthcoming as Argentina’s currency remains very weak, according to market sources.

The Lebac auction is being viewed as positive regarding how many Lebacs are going to be retired from the market, said a New York-based trader, adding that “IMF round 2” was expected to yield good results.

“We’ll have a better sense of what is going to happen this week, and whether the peso is going to stabilize or continue to go down,” the trader said.

Emerging markets debt was a bit better overall early Monday, with additional new issuance expected this week after a strong showing for deals that priced last week among Gulf Cooperation Council entities.

Cyprus joined the calendar with a planned benchmark of euro-denominated 10-year notes. But there was no word yet on Saudi Electricity Co. or Dubai’s DP World Ltd., which announced mandates last week. Saudi Electricity was planning a dollar-denominated sukuk, or Islamic bond, and DP World was planning a 10-year dollar-denominated sukuk and tendering for an existing $650 million of sukuk due 2019.

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