Middle East sovereigns mostly weaker on Gulf States’ rift; Venezuela steady; Pemex adds

By Rebecca Melvin

New York, June 6 – A number of deals priced in emerging markets on Tuesday, while existing Middle Eastern sovereign debt was mostly lower.

Turkey is planning to launch Securities and Exchange Commission-registered euro-denominated eight-year bonds, and Turkey-based Yapi ve Kredi Bankasi AS (Yapi Kredi) is offering lira-denominated three-year notes with price talk in the 13¼% area.

In the secondary market, Middle Eastern credits were weighed down by Monday’s news that Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have cut diplomatic ties with Qatar, accusing Qatar of backing and aiding terrorism.

Saudi 3¼% notes due 2026 were indicated at 98.43 bid, 98.66 offered Tuesday, which was ¼ to 1/3 point lower compared to 98¾ bid, 99 offered on Friday.

Bahrain’s 7% notes due notes, a $600 million issue that priced early this year, were seen at 104 bid, 104¾ offered on Tuesday, compared to 104½ bid, 104.81 offered on Friday.

Meanwhile, Venezuela’s 7% notes due 2018 were holding steady at 69 bid, 70 offered on Tuesday, according to a market source.

PDVSA (Petroleos de Venezuela SA)’s near-dated 8½% bonds were little changed on the day at 91½, and the benchmark PDVSA 9% bonds due 2021 were seen little changed at 52 bid, 53 offered.

Several of the bonds of Mexico’s state-owned oil company have been trading actively and better this week, including Pemex (Petroleos Mexicanos SAB de CV.

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