Risk appetite wanes after Paris, Beirut attacks; Turkish banks ‘feel slightly unloved’

By Christine Van Dusen

Atlanta, Nov. 16 – Emerging markets assets took a backseat to safe-haven investments on slower Monday after the terrorist attacks in Paris and Beirut.

“We are opening softer as the event in Paris over the weekend and weak commodities temper risk appetite,” a London-based trader said.

Investors remained concerned about the Middle East, particularly issuers like Egypt, Lebanon and Tunisia, he said.

Also on Monday, Ukraine returned to radar screens as violence escalated, he said.

“News from this morning stated that the situation is most tense near Donetsk airport,” he said.

Heading into the new week, volumes were limited for bonds from the Ukraine sovereign, said Fyodor Bagnenko, a fixed-income trader with Dragon Capital.

From Turkey, banks “feel slightly unloved at the moment,” the London trader said. “Corporates feel slightly better-positioned, with Asian demand.”

In other news, China-based Beijing Properties (Holdings) Ltd.’s new issue of $300 million 5½% notes due in 2018 that priced Thursday at 99.32 saw a final order book of about $2.4 billion from 121 accounts, a market source said.

Credit Suisse, Guotai Junan International, ICBC International, VTB Capital, Wing Lung Bank, DBS Bank and China Securities International were the bookrunners for the Regulation S deal.

Asian investors picked up 96% of the orders and Europe took 4%, with 43% from asset managers, 32% from private banks, 20% from banks and 5% from others.

In trading, the notes were spotted at 99½ bid, “despite volatility linked to the Paris attack over the weekend,” a trader said.

The proceeds will be used for general corporate purposes.

Cameroon deal sees demand

The final book for the Republic of Cameroon’s new $750 million 9½% amortizing notes due 2025 that priced Friday at 98.426 to yield 9¾% was $1.2 billion, a market source said.

The deal came at the middle of talk, which had been set in the 9¾% area.

Societe Generale CIB and Standard Chartered Bank were the bookrunners for the Rule 144A and Regulation S deal.

The notes went on to trade at 97 7/8 bid, 98.18 offered.

Proceeds will be used to finance development projects, specifically, to repay a bridge loan used to help the country’s monopoly oil refiner, to fund a three-year emergency plan to promote growth and improve living conditions and for long-term investment projects.

The United Kingdom picked up 40% of the orders, United States 31%, Benelux nations and Scandinavia 19% and others 11%. Investor type asset managers took 78%, hedge funds 10%, banks and private banks 7% and insurers and pension funds 5%.

© 2015 Prospect News.
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