Mexico, Jordan print bonds; Turkish banks advance deals; Saudi Arabia sees demand

By Christine Van Dusen

Atlanta, Oct. 25 – Mexico and Jordan sold notes and Turkey's Kuveyt Turk Katilim Bankasi AS and Sekerbank TAS advanced deals on a Tuesday that saw mostly positive sentiment for emerging markets assets as investors continued to chew on the $17.5-billion megadeal from Saudi Arabia.

“Following strong global manufacturing PMI data set for the month, futures have started to price in a probability for a Fed hike in December above 70%,” a London-based analyst said. “The overall sentiment remains solid, which has lured further issuers to move forward with their planned bond transactions.”

In trading, Saudi Arabia’s new $5.5 billion 2 3/8% notes due in 2021 that priced at 99.007 to yield 2.588%, or Treasuries plus 135 bps, traded flat to Monday, at 99.75 bid, 99.85 offered.

The $5.5 billion 3¼% notes due in 2026 that priced at 98.679 to yield 3.407%, or Treasuries plus 165 bps, on Tuesday traded at 99.53 bid, 99.63 offered after Monday’s 99.65 bid, 99.75 offered.

And the $6.5 billion 4½% notes due in 2046 that priced at 98.015 to yield 4.623%, or Treasuries plus 210 bps, traded at 99.63 bid, 99.88 offered after Monday’s 99.70 bid, 99.95 offered.

Investors were also keeping an eye on Venezuela-based PDVSA, which announced that holders of 39% of the company’s debt due 2017 agreed to swap it for a new bond with a longer maturity.

“This is less than the company’s minimum goal of 50% swap,” according to a report from Schildershoven Finance BV. “Due to the high level of uncertainties and increasing political risks in the country, we recommend avoiding the company’s bonds.”

Mexico does deal

Mexico priced a two-tranche issue of €1.9 billion notes due in 2025 and 2031 (A3/BBB+/BBB+), according to a filing from the sovereign.

The deal included €1.2 billion 1 3/8% notes due Jan. 15, 2025 that priced at 99.127 to yield 1.489%, or mid-swaps plus 173.4 basis points.

The €700 million tap of the sovereign’s 3 3/8% notes due Jan. 4, 2031 priced at 114.285 to yield 2.2%, or Bunds plus 207 bps.

BNP Paribas, Citigroup and Santander were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used to redeem Mexico’s outstanding 4¼% notes due 2017 and for general governmental purposes, including the refinancing, repurchase or retirement of domestic and external indebtedness.

Jordan issues notes

In its new deal, Jordan priced $1 billion 5¾% notes due January 2027 at 99.628 to yield 5.8%, or Treasuries plus 403.2 basis points, a market source said.

Citigroup and JPMorgan were the bookrunners for the deal.

Other details were not immediately available on Tuesday.

Kuveyt Turk sets talk

Turkey's Kuveyt Turk Katilim Bankasi AS set initial talk in the low-mid-swaps plus 400 basis points area for a $500 million issue of five-year Islamic bonds, a market source said.

The transaction will be Regulation S.

Other details were not immediately available on Tuesday.

The issuer is an Istanbul-based Islamic finance institution.

Sekerbank gives guidance

Turkey’s Sekerbank TAS set talk for an issue of dollar-denominated notes due in 10 years in the 10% area, a market source said.

Standard Chartered Bank is the bookrunner for the Regulation S deal.

Other details were not immediately available on Tuesday.

Sekerbank is a lender based in Istanbul.

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