Zhejiang Geely, 4finance sell notes; EM sees ‘tremendous volatility’; Romania seeks issue

By Christine Van Dusen

Atlanta, May 19 – China’s Zhejiang Geely Holding Group Co. Ltd. and Latvia’s 4finance Holding SA sold notes on Thursday as emerging markets assets experienced, as one trader put it, “tremendous volatility.”

“Tremendous volatility today in the emerging markets credit space, with aggressive early selling followed by a late-day bid,” he said. “We finish the day lower in cash bonds and wider in most spreads but well off our lows, as market pares losses throughout afternoon trading.”

Driving the volatility was the Federal Open Market Committee’s minutes from its April meeting, which raised the likelihood of a rate hike in June. This “served as a wake-up call, following recent comments by several Fed governors that markets were underestimating the probability of a rate hike as early as June,” a London-based strategist said. “In combination with lower oil prices, this has driven volatility.”

Brazil’s five-year credit default swaps spreads closed at 356 basis points from 346 bps after widening to 370 bps. Mexico’s finished the session at 178 bps from 176 bps after trading as wide as 188 bps earlier in the day.

“Lat-Am high yield finishes mixed on the day,” he said. “Venezuela’s curve continues to steepen, with front-end bonds outperforming.”

In deal-related news, Romania is planning to issue euro-denominated notes due in 12 years, according to an announcement from the sovereign.

© 2015 Prospect News.
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