Emerging markets see 'fairly constructive' day; Dubai Islamic Bank sets guidance for sukuk

By Paul A. Harris and Aleesia Forni

Columbus, Ohio, May 21 - The "downward slide" emerging markets debt experienced last week seemed to lighten up on Monday, as the tone of the market was "fairly constructive," according to market sources.

However, sources in both New York and London saw below average volumes on the day.

In the primary on Monday, Dubai Islamic Bank set initial price guidance for its proposed five-year benchmark-sized sukuk at mid-swaps plus 385 basis points, according to market sources.

The deal could launch by the end of this week, one syndicate source said.

HSBC, National Bank of Abu Dhabi, Emirates NBD, Deutsche Bank and Dubai Islamic Bank are bookrunners.

Asian junk names advance

Meanwhile, Asian sovereign credit default swaps were 3 bps to 5 bps tighter at the New York open, according to a market source.

High-yield corporates were ½ point to 1 point higher on short covering with a let up in negative headline financial news.

Yanlord Group and Winsway Coking Coal were outperformers among Asian high-yield corporates, both up 2 points overnight in Asian trading.

Also in the secondary, Banque Saudi Fransi's notes due 2017 were 100.40 bid, 100.70 offered at London's close on Monday.

The bank priced a $750 million issue of 2.947% five-year senior notes at par to yield mid-swaps plus 185 bps on May 15.

Additionally, Saudi Electricity Co.'s 2.665% notes due 2017 were seen at 100.25 bid, 100.75 offered, while the company's 4.211% notes due 2022 traded at 101.00 bid, 101.50 offered near the end of London's session.

The company priced $500 million of 2.665% five-year sukuk at par to yield mid-swaps plus 140 bps and a $1.25 billion tranche of 4.211% 10-year paper at par to yield mid-swaps plus 195 bps in late-March.

© 2015 Prospect News.
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