Primary hosts Turkey, Guatemala, others; equity fall puts pressure on EM; Lat-Am spreads widen

By Christine Van Dusen

Atlanta, April 28 – Turkey, Guatemala, Greece’s Black Sea Trade and Development Bank, Poland’s Bank Gospodarstwa Krajowego, China’s Huawei Investment & Holding Co. Ltd. and Banque Ouest Africaine de Developpement sold notes on a turbulent Thursday as equities plummeted on weaker-than-expected economic data from the United States and news that the Bank of Japan would maintain its current easing program.

In trading, Latin American global risk assets indeed ran into some “turbulence” on Thursday, with the rally fading and turning into a selloff, a New York-based trader said.

“Coming in this morning, Lat-Am external credit was holding its own and was quite firm, but contagion from equity weakness finally hit EM bonds this afternoon,” he said.

Brazil’s five-year credit default swaps spreads closed at 340 basis points from 333 bps after trading as tight as 332 bps earlier in the day. Mexico’s closed at 158 bps from 152 bps after trading at 151 bps.

“Cash prices initially rallied but turned lower despite the rally in U.S. Treasuries as spread widening proved too much,” he said. “Latin American high yield finishes mixed on the day.”

Trading of bonds from the Middle East was “a little less frantic” on Thursday than it had been earlier in the week, a London-based trader said.

Abu Dhabi remained active, with its long bonds still outperforming.

© 2015 Prospect News.
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