Morning Commentary: Turk Eximbank notes trade up; Dubai Islamic Bank bonds ‘doing well’

By Rebecca Melvin

New York, Jan. 17 – Turkiye Ihracat Kredi Bankasi AS’ (Turk Eximbank) newly priced 8¼% notes due 2024 traded up out of the gate on Thursday after the export credit agency priced $500 million of the five-year notes tighter than initial price talk.

The new Turk Eximbank notes “traded straight up” from the 99.779 reoffer to 100¼ bid, 100½ offered, and the spread came in about 25 basis points from pricing at Treasuries plus 575.6 bps, a London-based trader said.

“After spending the London session in that ballpark, it then took another leg higher as the U.S. accounts came in to top up the allocations,” the trader said, putting the market close on the new 8¼% notes at 100 5/8 bid, 100 7/8 offered.

The deal came on the heels of the Turkish central bank’s action to stand pat on rates at its meeting on Wednesday. There had been concerns that the central bank would ease from the 24% rate benchmark as inflation has eased. Inflation fell from a 15-year high due to a rebound in the lira.

The new perpetuals of Dubai Islamic Bank PJSC traded well after the bank priced $750 million of the bonds at par for a profit rate of 6¼%, or Treasuries plus 366.4 bps. The bonds are non-callable for six years.

The perpetuals were seen closing at 100.85 bid, 101.10 offered and “doing well,” a market source said.

In Latin America, Mexico priced $2 billion 4½% 10-year notes at 99.382 to yield 4.577%, or a spread of Treasuries plus 185 bps, according to a term sheet.

Pricing came tight to initial price talk for a yield in the Treasuries plus 210 bps area.

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