Roadshow for Dar Al-Arkan Real Estate; Damac Real Estate plans bonds; South Africa widens

By Christine Van Dusen

Atlanta, March 31 – Saudi Arabia’s Dar Al-Arkan Real Estate Development Co. set a roadshow to market a dollar-denominated issue of Islamic bonds due in five years and Dubai’s Damac Real Estate Development Ltd. planned new notes on a Friday that saw bonds from South Africa widen on the news that the finance minister was getting the boot.

“President Zuma finally pulled the trigger on the cabinet reshuffle, which sees nine cabinet members being replaced,” a London-based analyst said. “Finance Minister Gordhan is certainly the most prominent member and will be replaced by previous Home Affairs Minister Gigaba, who is considered to be loyal to President Zuma and with little financial and business experience.”

Five-year credit default swaps spreads and cash bonds initially widened by 20 basis points to 25 bps “in line with our expectations,” he said. “The external macro backdrop could buffer any more meaningful widening for now.”

South Africa’s Naspers Ltd. saw its bonds move out between 10 bps and 13 bps while Eskom Holdings’ notes widened by about 35 bps, he said.

“South African credit has had a solid run over the last few months despite the lurking political risks,” he said. “We think that the strong technical is likely to dissipate now, with risks continuing to remain to the downside.”

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