EM credit starts U.S. holiday-shortened week on firm footing; Nigeria sees high demand

By Rebecca Melvin

New York, Nov. 20 – Emerging credit markets opened on firm footing on Monday with higher underlying rates and stabilizing oil prices lending support and as investors look to fit most business into the early part of the week ahead of the U.S. Thanksgiving holiday on Thursday, according market sources.

Nigeria launched and ultimately priced $3 billion of 10- and 30-year eurobonds below initial talk, after order books were oversubscribed by more than 2½ times.

The African nation priced $1.5 billion of 10-year bonds at 6½%, compared to initial talk at 6¾%; and $1.5 billion of 30-year notes at 7 5/8%, compared to initial talk at 7 7/8%.

The new paper looked cheap, a London-based source said, adding that the jury was still out regarding the appeal of the bond based on secondary market action in the issues on Tuesday.

Back in secondary market action, Turkey’s sovereign bonds were an exception to generally solid markets, with the curve trading 7 basis points to 10 bps wider on the day and with greater weakness in the nearer-dated paper.

Investors were still eyeing Venezuela and Petroleos de Venezuela SA bonds as the Americas credit derivatives determinations committee of the International Swaps and Derivatives Association held a late meeting on Monday regarding auction details on credit default swap contracts on the debt of those issuers.

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