Saudi Arabia, Turkey issues firm in secondary market; Pemex, Mexico visit New York investors

By Paul A. Harris

Portland, Ore., Jan. 10 – Deals priced Wednesday by Saudi Arabia and the Republic of Turkey were in decent shape in the Thursday secondary market, according to a market source in New York.

Sovereign issues from Brazil and Mexico were better on the day; however, both were being outperformed, to a certain extent, by Argentina, the source said.

Argentina's bonds maturing in 2028 were 77 bid on Thursday, versus 72 bid at the beginning of the year.

Meanwhile, the new issue market went quiet on Thursday and could stay that way ahead of Tuesday's Brexit vote in the British Parliament.

Nevertheless Petroleos Mexicanos SAB de CV and Mexico paid visits to investors in New York on Thursday, likely feeling out the market ahead of near-at-hand deals, the source said, adding that both typically issue in January.

Saudi Arabia, Turkey firm

Turkey's new 7 5/8% long 10-year notes (Ba3//BB) were flat to slightly better in Thursday trading, up 1/8 point at 99 5/8 bid, the market source said.

The $2 billion issue priced Wednesday at 99.555 to yield 7.68%, tight to yield talk in the 7 7/8% area.

Elsewhere, bonds priced Wednesday in a vastly oversubscribed two-part deal from Saudi Arabia – its first in the wake of the brutal murder of journalist Jamal Khashoggi – were both firm in Thursday trading, the source added.

Saudi Arabia (A1/A+) priced $4 billion of 4 3/8% long 10-year bonds due April 16, 2029 at Treasuries plus 175 basis points, tight to spread talk in the 185 bps area. Initial guidance was in the 200 bps area.

It also priced $3.5 billion of 5¼% 31-year notes at Treasuries plus 230 bps, tight to spread talk in the 235 bps area. Initial guidance was in the 250 bps area.

Orders were said to come to $27 billion across both tranches, the source said, adding that both Turkey and Saudi Arabia paid up, somewhat, to get their deals done.

China's Mingfa coming Friday

Mingfa Group (International) Co. Ltd. made available a prospectus on Thursday for a $200 million amount of 15% one-year unsubordinated unsecured bonds that it intends to issue on Friday in a private placement-style execution.

The bonds will be sold at par and are set to mature on Jan. 15, 2020.

Head & Shoulders Securities Ltd. will be the placement agent for the Regulation S-only formatted transaction. (See related story in this issue.)

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