Bank of East Asia prices; Zenith Bank begins meetings; pipeline ‘fairly busy’ ahead

By Colin Hanner

Chicago, May 12 – Emerging markets ended the week with little to work with, a market source said, though they pointed to the long bonds in Saudi Arabia and Abu Dhabi, which were gaining some attention.

Those bonds were helped by the retreat in U.S. Treasury yields, which dropped towards the 3% mark, and then on Friday afternoon sank to 2.986%, all in response to weaker than expected U.S. retail sales data.

Outside of a handful of new issues coming to market on the week, the geopolitical scene has been rather muted.

“It has been a fairly calm week with relatively little news flow,” a market source said, adding that the biggest story to hit headlines was the initial firing of Federal Bureau of Investigation director James Comey and the continued fallout of his removal.

One benchmark deal squeezed out of emerging markets before the weekend on Friday as Hong Kong-based Bank of East Asia, Ltd. priced $500 million of 5 5/8% perpetual notes at par, a market source said.

The notes (BB/Ba2) priced tighter than talk that had been set in the 6% area.

In Nigeria, Lagos-based Zenith Bank will begin investor meetings for a five-year dollar-denominated benchmark bond, a market source said.

“[Emerging market] credit remains in favorable position driven by further inflows,” a market source said. “Ahead of Ramadan starting in end-May, we are however likely to see a fairly busy primary market pipeline.”

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