Weaker U.S. data gives EM bonds a boost; Turkey in focus; Egypt outperforms; Ghana deal ahead

By Christine Van Dusen

Atlanta, July 29 – Emerging markets assets received a strong push into the weekend with the release of weaker-than-expected economic data from the United States for the second quarter.

Now, “investors are awaiting the European banks’ stress-tests results,” according to a report from Schildershoven Finance BV. “We do not rule out some correction in the European bonds following the release of the stress-tests results. However, it could provide a good opportunity to buy issues at a lower price, as the central bank interventions should mitigate the potential negative effect.”

Also impacting the picture at the end of the week: Crude oil prices have dropped almost 8%.

But, so far, that has not “caused wider spread concerns,” a London-based analyst said.

Turkey remained on the market’s mind, as the country continued recovering from a recent coup attempt.

“Investors are now waiting for Friday’s rating review by Moody’s where the sovereign’s Baa3 rating is currently under review for downgrade,” he said. “We consider the date as too early for Moody’s to conclude its review, but it remains relevant in providing further guidance.”

Meanwhile, bonds from Egypt outperformed as the sovereign made progress in discussions with the International Monetary Fund about a three-year funding program that could total as much as $12 billion.

“According to the government, the funds will help to plug a gap of $21 billion in external financing for the next three years,” the analyst said.

In response, Egypt’s bonds were solid on Friday, with the 2025s about 35 basis points tighter, week over week, he said. African Export Import Bank, which has “substantial exposure to Egypt,” saw demand for its bonds.

“An Egyptian official also reiterated the Arab Republic’s plans to revive a potential eurobond sale, as borrowing costs are expected to decrease once a reform program is approved by the IMF,” he said.

Ghana sets roadshow

Ghana will set out on Monday for a roadshow to market a benchmark-sized issue of dollar-denominated notes that will be issued concurrent with a tender offer, a market source said.

BofA Merrill Lynch, Citigroup and Standard Chartered are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will be held in the United States and the United Kingdom.

Pertamina seeks issuance

Indonesia’s PT Pertamina is looking to issue $1.5 billion of global bonds, a market source said.

Other details were not immediately available on Friday.

Pertamina is a state-owned oil and gas company based in Jakarta, Indonesia.

Adani sells dollar bonds

India’s Adani Transmission Ltd. on Thursday printed a $500 million issue of 4% notes due Aug. 4, 2026 at 99.081 to yield 4.33%, or Treasuries plus 260 bps, a market source said.

The notes priced tighter than talk, set tin the 290 bps area.

Barclays, DBS, Standard Chartered, Emirates, NBD Capital, MUFG Securities, Nomura Securities, Societe Generale and SBI Capital were the bookrunners for the deal.

This issuer is an electric power transmission company based in Ahmedabad, India.

Notes from EXIM India

Export-Import Bank of India (EXIM India) priced $1 billion 3 3/8% notes due 2026 at 99.933 to yield 3.383%, or Treasuries plus 187.5 bps, a market source said.

BofA Merrill Lynch, Barclays, Citigroup, JPMorgan and Standard Chartered were the bookrunners for the deal.

Other details were not immediately available on Friday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.