EM more upbeat with higher stocks; Venezuela, PDVSA mixed, trading with accrued interest

By Rebecca Melvin

New York, Nov. 16 – Emerging credit markets were more upbeat on Thursday compared to earlier in the week as global stock markets and U.S. Treasury yields traded up and the CBOE volatility gauge continued to come back in from a spike Wednesday morning.

Even the market for Venezuela and Petroleos de Venezuela SA felt healthier, although the two entities ended mixed on the day, with the Venezuela curve finishing lower by ¼ point to ¾ point and the PDVSA curve ending higher by the same amount.

Venezuela’s 2022 notes were quoted 29¼ bid, 30¼ offered at the end of Thursday, which up from 26 bid, 28 offered on Tuesday.

Elsewhere, emerging markets saw a little bit of spread tightening across the board early on Thursday, with some exceptions such as Croatia, a London-based trader said.

Many Middle Eastern credits were one to several basis points better. But a weak name was Saudi Arabia-based property developer Dar Al-Arkan Real Estate Development Co., which was still well offered after investors began to swear off Qatar’s Ezdan Holding Group 2021 and 2022 notes early in the week.

Dar Al-Arkan’s notes due 2018 were at 99 bid, 100 offered on Thursday. But its Islamic bonds due 2022 were down to 92½ bid, 95 offered.

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