New deals from ChemChina, Cetin; OPEC members agree to cut production; EM tightens

By Christine Van Dusen

Atlanta, Nov. 30 – China National Chemical Corp. (ChemChina) and Czech Republic-based Ceska telekomunikacni infrastruktura as (Cetin) priced notes on a Wednesday that saw some emerging markets assets tighten after oil producers agreed to cut production, which gave oil prices a boost.

The Organization of Petroleum Exporting Countries will lower production in the fall by about 4½%. That is good news for energy-heavy names like Azerbaijan, which saw its 4¾% 2024 notes trade at 99¼ bid, 99¾ offered, about 15 basis points tighter on the day. But prices, overall, remain lower than they were in 2014.

“Interestingly, there is little detail on who will bear the brunt of production cuts,” a trader said. “This is very good news for Russia, and by corollary for the ruble.”

Looking to Latin America, Brazil’s 2023s were trading “rich” versus its 2041s as the sovereign curve continued to steepen, even as U.S. Treasuries flattened, another trader said.

“We have been breaking records of steepness in the curve virtually every day for almost three months,” he said. “The little demand there has been recently is in seven-years, a bit in 10-years. Otherwise, there is no consistent demand for the rest of the curve.”

Mexico and Colombia have seen similar trends, he said.

Meanwhile, bonds from Turkey moved in between 7 bps and 9 bps before sellers emerged, pushing spreads about 3 bps to 5 bps tighter.

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