Fibra Uno, Terrafina, Iraq, Chexim deals on deck; equity rally tightens some EM spreads

By Christine Van Dusen

Atlanta, Sept. 8 – Mexico’s Fibra Uno, Mexico’s Cibanco SA Institution de Banca Multiple, Trust F/00939 (Terrafina), Iraq and Export-Import Bank of China advanced deals on Tuesday as a rally in equities helped boost some emerging markets bonds.

Asian bonds, however, put in a very muted morning session on Tuesday, following weak but unsurprising economic data from China, a London-based trader said.

As the day went on, the tone remained “fairly sluggish,” another trader said, “with spreads broadly unchanged to 3 basis points wider.”

Volumes and liquidity remained low across all sectors, he said.

“The EM asset class has a fairly bumpy road ahead, and it’s hard to build a bullish scenario which is very likely for EM,” a trader said. “So I guess any rally we do get should lag [developing markets].”

Looking to Latin America, trading was slow and mostly quiet for corporates, a New York-based trader said.

Most investment-grade names from Brazil felt heavier, he said, while Braskem SA weakened after signing a naphtha supply contract with Petroleo Brasileiro SA.

Bonds from the Middle East received some attention on Tuesday, with investors adding some in the morning before turning defensive in the afternoon, a London-based trader said.

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