Morning Commentary: Turkey, broader EM market continue to improve; Vivo Energy, Enel Chile on tap

By Rebecca Melvin

New York, May 30 – Turkey’s credit continued to improve early Wednesday as the broader markets regained their footing following a rout on Tuesday tied to fears over growing political risk in Italy and the future of the euro zone.

Turkey’s bonds fell sharply two weeks ago amid a plunge in the lira. On Wednesday the bonds improved for a second straight day, albeit by a lesser amount, following word on Monday that Turkey’s central bank moved to increase and simplify rates to protect the lira.

Turkey’s 6 1/8% notes due 2028 were up 0.143 point to 96.490 at late morning. On Tuesday the bond gained 1.4 points to 96.285.

Rates were steady on Wednesday. Cash prices had been adjusting to a swing on Tuesday that took yields down sharply. On Wednesday the yield on the benchmark U.S. Treasury 10-year note was 2.834%, which was little changed.

Africa-focused Vivo Energy Investments BV announced an offering of five-year notes, which will be non-callable for two years, or seven-year notes, which will be non-callable for three years.

JPMorgan and Societe Generale are bookrunners for the Rule 144A and Regulation S deal.

Vivo Energy is a Shell licensee, operating 1,800 service stations in 15 countries and is using proceeds for repayment of borrowings, expenses and toward its proposed acquisition of Engen International Holdings (Mauritius) Ltd.

Also announcing a deal was Enel Chile SA, which is planning dollar-denominated notes via joint bookrunning managers BBVA Securities Inc., Citigroup Global Markets Inc., JPMorgan, Morgan Stanley & Co. LLC, Santander Investment Securities Inc. and Scotiabank.

Enel Chile is power generation and distribution company that is 61.9% owned by Italy’s Enel SpA.

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