Issuance from Jordan; EM starts strong then falters; Lat-Am spreads widen; Finansbank in focus

By Christine Van Dusen

Atlanta, Nov. 4 – Jordan printed notes on a Wednesday that saw investor sentiment start off strong and then peter out into the close, dampened by weaker currencies, commodities and equities.

After performing well during the morning – with Mexico dominating trading action and Colombia’s bonds getting a bounce – Latin American credit spreads widened. Mexico’s five-year credit default swaps spreads moved to 142 basis points from 135 bps, a trader said, while Brazil’s moved out to 392 bps from 388 bps.

“Cash prices end lower on the day as spread widening and U.S. Treasury weakness have levels lower by 25 cents to 50 cents,” he said. “Volumes quiet for the day, with two-way inquiries.”

Sovereign bonds from Turkey lagged the rates move, but spreads stayed “fairly steady” while still underperforming South Africa and Russia, another trader said.

“Investors focused on lifting risk in those areas,” he said. “But we did see buyers coming into the close.”

Banks from Turkey continued to trade well, with real money lifting risk in the afternoon, he said.

Also from Turkey, Finansbank AS was in the news after National Bank of Greece announced it would sell 100% of its stake in the Turkish lender.

“The decision follows the results of the asset quality review and stress test on Greek banks that revealed a shortfall of €1.6 billion in the baseline and €4.6 billion in the adverse scenario for NBG,” a trader said.

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