Jamaica, CCB sell notes; Lat-Am widens, then tightens; Islamic perpetuals lag; HNA ahead

By Christine Van Dusen

Atlanta, Aug. 11 – Jamaica and China Construction Bank (Singapore branch) sold notes on Thursday as investor fatigue led cash prices for some emerging markets assets to dip on low volume, though Latin America remained firm.

“The market seems to be experiencing a bit of a hangover from yesterday’s rip-fest that had almost any offer lifted in the cash market,” a trader said in the morning.

Latin American bonds saw buyers outweigh sellers before switching direction as the Treasury sell-off intensified later in the day, another trader said.

“Yesterday we saw a renewed drop in oil prices on the back of an increase in crude inventories and news that Saudi output has reached a new record,” a London-based analyst said.

Middle Eastern bonds, meanwhile, saw “very solid demand again,” a London-based trader said.

Only a few names lagged, including some Islamic perpetual bonds, but, “overall, another decent effort by the market,” he said.

Taking a closer look at Latin America, assets rallied on the move in oil, with five-year credit default swaps spreads for Brazil closing at 259 basis points from 263 bps, a New York-based trader said.

Mexico’s CDS moved to 136 bps from 138 bps.

“Latin American high yield finishes firmer on the day, with both Venezuela and Argentina higher,” he said.

In other news, China’s HNA Group Co. Ltd. is marketing a $300 million issue of notes, a market source said.

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