Steinhoff bonds drop after Moody’s downgrade; EM primary quiets; market eyes Fed news

By Rebecca Melvin

New York, Dec. 8 – Steinhoff International Holdings NV bonds saw further spread widening on Friday as the price languished in the mid-50s after Moody’s Investors Service downgraded its ratings on the South African retailer including the Steinhoff Europe AG senior unsecured notes.

The Steinhoff 1 7/8% notes due 2025, of which €800 million priced in July, saw spreads blow out about 130 basis points. The bond price fell to 55 from 84 on Wednesday.

Elsewhere, emerging market credit quieted down after a busy week of new issuance, with no new deals added to the calendar in Latin America or the Central & Eastern Europe Middle East and Africa. There were new deals for the calendar for Asia however.

There is a deal on the calendar for Monday’s business from Alpha Holding SA de CV. “You may see one or two more deals get done before the Fed, but after the Fed everyone is going to be shutting down for the holidays,” a New York-based syndicate source said.

The U.S. Federal Open Market Committee is meeting next Wednesday for the last time this year and is expected to raise its benchmark fed funds rate one more time for a complement of three increases this year.

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