EM bonds flattish on day after positive week; new Saudi notes below par; Lebanon struggles

By Rebecca Melvin

New York, Jan. 11 – Spreads on emerging markets debt ended little changed on Friday after a weaker start. But the market is still in a better place following a strong first full week of trading for 2019 compared to where it closed out 2018. Several sovereign issues priced deals and there was secondary market demand, but Lebanon plunged on fears raised by “some report about restructuring,” a London-based market source said.

Saudi Arabia’s new 4 3/8% long 10-year bonds due April 16, 2029 were quoted at a tight 99.70 bid, 99.80 offered early Friday. The $4 billion tranche priced midweek. Its sister issue, $3.5 billion of 5¼% 31-year notes, was quoted at 99.40 bid, 99.55 offered.

In Wednesday's action Kingdom of Saudi Arabia (A1/A+) priced $7.5 billion of notes in two tranches.

The State of Israel also launched and priced €2.5 billion of senior notes (expected ratings A1/AA-/A+) in two evenly split tranches.

Republic of Turkey priced $2 billion of new 7 5/8% long 10-year notes (Ba3//BB) that were flat to slightly better on Thursday.

Republic of Philippines and Republic of Slovenia priced benchmark deals on Monday.

In Latin America, Brazil’s Votorantim Cimentos International SA, a subsidiary of Votorantim Cimentos SA, is offering to exchange up to $500 million principal amount of its $1,150,500,000 of 7¼% senior notes due 2041.

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