South Africa does deal on risk-off day; spreads widen, prices slump; roadshow for Vakifbank

By Christine Van Dusen

Atlanta, April 7 – The Republic of South Africa sold notes as stocks dropped on a volatile, risk-off Thursday that had many emerging markets spreads widening and cash prices slumping.

“Unlike yesterday, the market feels a little vulnerable overall, and certainly timid, but I can’t say offers are coming in lower in the aggregate,” a New York-based trader said.

Latin American bonds were quiet on Thursday morning, with Colombia-based Ecopetrol SA moving lower again amid “no action whatsoever on the name today so far,” he said.

Mexico-based Cemex SAB de CV remained weak, particularly on the long end, he said.

Five-year credit default swaps spreads for Brazil widened to 401 basis points from 383 bps, while Mexico’s moved to 179 bps from 169 bps.

“Cash prices are unable to hold on to yesterday’s levels, as spread-widening more than offsets any benefit from the United States Treasury rally,” another New York trader said.

Turkey’s Turkiye Vakiflar Bankasi TAO (Vakifbank) will set out on April 12 for a roadshow to market a euro-denominated notes via Barclays, BNP Paribas, Erste Group, Natixis and UniCredit in a Regulation S deal.

In other deal-related news, market sources were whispering about two possible deals: Russia’s OAO Sibur Holdings could issue as much as $700 million of bonds this year, and Lebanon is reportedly contemplating an issue of at least $1 billion of notes.

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