Mexico, Banco del Estado price; Oman, Slovenia mandate banks amid strong secondary

By Rebecca Melvin

New York, Jan. 3 – The emerging markets primary was off to a strong start for 2018 with new deals announced and priced on Wednesday by Mexico and Banco del Estado de Chile, and mandates announced by Oman and Slovenia, according to market sources.

The new deals were getting underway against a backdrop of strength in the secondary market, a London-based trader said. In the Middle East and Africa region, there has been “relentless demand for the most part” over the first two trading days of the year.

The Oman sovereign curve was called just 1 to 3.5 basis points wider as a triple-tranche offering of five- 10- and 30-year notes started to roadshow.

Oman’s 2022 notes were seen last at 100.625 and at a z-spread of 147 bps, the Oman 2027 notes traded last 100.875 at a spread of 286 bps, and the Oman 2047 notes were last bid at par at 396 bps, the trader said.

Meanwhile Lebanon was very strong and called 10 bps to 20 bps tighter, depending on the tenor.

The new bond offerings should see decent demand given the secondary market tone, the trader said.

Mexico priced $2.6 billion in new global notes including $2 billion in a new 10-year maturity and a $600 million tap of its 4.6% global notes due 2048.

The new 3¾% notes due 2028 priced at 99.571 to yield 3.802%, or Treasuries plus 135 bps, and the tap of 4.6% notes due 2048 priced at 98.493 to yield 4.694%, or Treasuries plus 190 bps.

Final terms came tight compared to initial yield talk of Treasuries plus 160 bps area for the 10-year notes and Treasuries plus 205 bps for the 30-year notes.

Meanwhile, Banco del Estado de Chile priced $500 million of three-year senior notes at par to yield 2.668% or a spread of 65 basis points over Treasuries.

The Rule 144A and Regulation S notes priced tight compared to initial talk for a yield over Treasuries in the 80 bps area.

A market source said that good sentiment marked EM credit right now, and a second source said that it was expected the emerging primary market would be busy in the coming weeks.

Oman, Slovenia coming up

Elsewhere, the Sultanate of Oman, acting through its Ministry of Finance, mandated Citigroup, HSBC, J.P. Morgan, SMBC Nikko and Standard Chartered Bank as joint lead managers and bookrunners to arrange a series of fixed-income investor meetings on a triple-tranche deal of U.S. dollar-denominated notes.

Meetings to be held in London, New York and Boston beginning on Friday and wrapping up on Tuesday were expected to result in successful pricing of five-, 10- and 30-year tranches (expected ratings: Baa2//BBB-) distributed under Rule 144A and Regulation S as part of the government’s unlimited global medium-term note program.

In addition, the Republic of Slovenia mandated Citigroup, Commerzbank, Goldman Sachs International Bank, Jefferies and NLB to manage a planned benchmark offering of euro-denominated 10-year notes.

The Regulation S deal was expected to launch in the near future, subject to market conditions, according to a market source.

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