Emerging markets spreads widen amid turbulence; planned Gilex deal pushed to next week

By Rebecca Melvin

New York, March 23 – Spreads in the emerging markets secondary market remained wide on Friday after blowing out on Thursday in tandem with a rout in the broader markets as uncertainty regarding the Trump administration’s trade tariffs combined with already simmering concerns about inflation and rates.

New issuance had slowed this past week, prior to Thursday’s market turbulence, and most deals on the calendar were able to price anyway. But Colombia-focused Gilex Holding Sarl has pushed pricing of its planned offering of U.S. dollar-denominated notes to next week due to market conditions, according to market sources on Friday.

Lower beta names in emerging markets that had been struggling prior to this week bore the brunt of the pain at the end of this week, a London-based trader said. Bahrain, which has a multi-tranche dollar benchmark deal on tap for pricing next week, was an underperformer in terms of spreads on Friday and this past week.

It was one of the worst performers in terms of spreads due to the combination that it is one of those higher beta names and also because of its new issues coming, the trader said. It was a “bit of both.”

Bahrain’s sovereign curve was as much as 56 basis points wider on the week for its short dated 6.274% notes due this year.

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