Oil rally pumps up EM debt; Ezdan, Slovenia, State Grid do deals; Brazil in focus again

By Christine Van Dusen

Atlanta, May 11 – Qatar’s Ezdan Holding Group, Slovenia and State Grid Corp. of China sold notes on a firm Wednesday for emerging markets assets, with the rally in oil boosting Latin American debt.

“It’s a calm morning in terms of news flow, with markets opening slightly firmer,” a London-based strategist said. “The positive moves in EM are partly driven by higher oil prices, due to security concerns in the Niger Delta, exemplified by Shell’s and Chevron’s decision to evacuate staff for safety.”

The market seemed to be absorbing most of the new paper from emerging markets issuers “with ease,” a London-based trader said. “Great performance, given the heavy supply penciled in ahead of the summer.”

Turkey remained on radar screens, with its bonds putting in “confounding” performance as “dollar bonds are holding the recent retracement while the lira has started to weaken again,” he said. “My only explanation is the positioning.”

Five-year credit default swaps spreads for the sovereign were trading on Wednesday morning at 265 basis points after a wide of 275 bps last week, he said.

Brazil was in focus again, as its senate on Wednesday was set to decide on President Dilma Rousseff’s impeachment.

Brazil’s five-year credit default swaps spreads closed Wednesday at 323 bps from 335 bps, while Mexico’s moved to 164 bps from 165 bps, a New York-based trader said.

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