CAF sells notes; Gulf region rebounds; Turkey spreads narrow; Petrobras, Vale get tighter

By Christine Van Dusen

Atlanta, Nov. 3 – Venezuela’s Corporacion Andina de Fomento (CAF) sold notes on Tuesday as emerging markets put in a “solid session,” with risk sentiment improving and names from Kazakhstan tightening by as much as 21 basis points.

“[The Gulf Region] rebounded from a weak tone yesterday,” a trader said. “The Saudi Electricity Co. curve was 10 bps to 15 bps tighter.”

Bahrain’s bonds moved in by as much as 20 bps, he said.

“The three tranches from Lebanon are trading but under the radar and with limited volumes,” he said.

The sovereign printed $1.6 billion notes, with $500 million 6¼% notes due 2024, $500 million 6.65% notes due 2028 and $600 million 7.05% notes. All three tranches priced at par.

“Seeing demand for Nigerian banks and Gulf perpetuals,” the trader said. “Quieter than yesterday, but still active enough.”

“The market is opening up firmer, with a decent risk tone as developed-market rates – off the highs – helped EM sentiment,” another trader said. “The rest of the week I think will be spent repositioning into [economic data] and index followers adjusting from the big rally in Turkey.”

Looking to Latin America, the market was moving higher on Tuesday, a New York-based trader said.

Brazil-based Petroleo Brasileiro SA moved a point higher, while Vale SA moved 10 bps tighter after tightening that much on Friday and Monday, he said.

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