Morning Commentary: Turkey’s notes talked at 6 1/8% area; Banco Marco sells $300 million

By Colin Hanner

Chicago, May 4 – With the week winding down in emerging markets, at least one new deal is trying to push through to price before the weekend.

Turkey is offering a 30-year dollar-denominated benchmark deal with initial price talk in the 6 1/8% area, a market source said.

Fair pricing would come in tighter to a 5 7/8% area, the market source added.

Citigroup, Deutsche Bank and Goldman Sachs are the bookrunners for the deal.

Not even a month after the public voted to give its executive branch more power, the country stabilized similarly to the way it had in 2016 after a failed coup attempt and terrorist attacks, a market source said.

“With the constitutional referendum out of the way, we have seen a further boost in investor confidence with sovereign [credit default swaps] and cash having tightened [30 basis points] since,” a market source said.

Turkey’s two long-maturity notes have $3 billion each, an amount that could be possible for the new notes when they’re expected to price later Thursday, a market source said.

Banco Macro active

Argentina’s Banco Macro SA priced $300 million equivalent of 17½% peso-denominated notes due 2022 at par, according to a Wednesday press release.

The notes were sold to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S, according to a company announcement.

And, in Argentina’s sovereign space, activity was on the downside.

“As strong as we opened yesterday, we are opening weaker today,” a trader said of Argentina’s sovereign bonds.

Its 6¼% notes due 2019 were quoted at 105.9 bid, 106.4 offered.

The 7½% notes due 2026 were quoted at 110 bid, 110½ offered.

And its 7 1/8% notes due 2036 were quoted at 101.65 bid, 102.4 offered.

Venezuela’s shakeup

Venezuela opened the morning lower amid lowering crude oil futures prices and continuing protests that have attracted the attention around the world, with some U.S. senators even introducing legislation to target those involved in the country’s corruption, Reuters reported.

The state’s oil and natural gas company Petroleos de Venezuela SA’s 8½% notes due 2018 were down ¼ point to 88¼ bid, 89¼ offered.

Its 5 3/8% notes due 2027 were also down ¼ point to 37½ bid, 38½ offered.

Venezuela’s 8¼% notes due 2024 were down ¼ point to 46¼ bid, 47¼ offered.

And its 9 3/8% notes due 2034 were unchanged at 47¼ bid, 48¼ offered.

Wendy Van Sickle contributed to this review

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