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.

Qatar National Bank could be a buyer, he said.

“The headline sent the curve up one point, with the Street paying on,” another trader said. “If QNB does a 100% buyout, we could see multiple rating uplifts and spreads trade inside the [Turkiye Garanti Bankasi AS] curve.”

Looking to Pakistan, the 2017 bonds saw some two-way flows while some investors in the 2024s and 2025s lost interest, he said.

Jordan sells bonds

In its new deal, Jordan priced $500 million 6 1/8% notes due in January of 2026 at 98.155 to yield 6 3/8%, a market source said.

The notes were talked at a yield in the 6¾% area.

Citigroup and JPMorgan were the bookrunners for the Rule 144A and Regulation S deal.

Shortly after pricing, the notes were seen trading at 101 bid, 101 3/8 offered.

Angola launches notes

Angola launched a $1.5 billion issue of 10-year notes at 9½%, a market source said.

The notes were talked at a yield in the 10% area.

Deutsche Bank, Goldman Sachs and ICBC International are the bookrunners for the Rule 144A and Regulation S deal.

“Everybody is upset they did not get enough Jordan on board. Now trading up three points and leaving investors in the dust,” a trader said on Wednesday morning. “This baby’s gray is powerful too.”

The Angola deal looks good for many reasons, including the deal’s “absolute yield,” he said. “Cheap to almost all peers, incentivized issuer, lots of frustrated investors with deep pockets, risk on.”

Shandong sets talk

In other news, China-based metals and mining company Shandong Gold Group Co. Ltd. set talk in the Treasuries plus 195-bps area for a $300 million issue of three-year notes, a market source said.

Bank of China, Bank of China (Hong Kong), BOC International and ABC International are the joint bookrunners for the Regulation S deal.

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