Dominican Republic’s new tap gains; Turkey’s Yapi Kredi bonds look ‘somewhat attractive’

By Rebecca Melvin

New York, June 14 – Emerging markets ended little changed on Wednesday after a U.S. Federal Reserve rate hike that was widely expected. There were some newer bonds in focus and getting a lift, however, including the Dominican Republic’s new $500 million tap of its 5.95% bonds due 2027.

The Dominican Republic bonds were better by about a point after pricing at a reoffered 106.38 on Tuesday.

“There was initial disappointment with the pricing at the tight end of the range and there was some late selling from flippers late in the day yesterday. However, like everything else today they are ripping, at 107.1 to 107.6, with little volume trading in the street,” a trader said about the Dominican Republic tap.

Earlier, Turkey’s Yapi ve Kredi Bankasi AS (Yapi Kredi) said it was offering a benchmark $500 million of seven-year bonds at 5.85%, which was getting a look from investors.

The bond was considered somewhat attractive at implied spread levels of mid-swaps plus 398 basis points to mid-swaps plus 411 bps, MUFG Securities analyst Trieu Pham said in a note. The spread levels implied a higher 6% to 6 1/8% coupon.

The general tone of emerging markets remained one of caution, given currently robust pricing, an emerging markets strategist said.

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