Morning Commentary: Saudi Electricity, South Africa’s Sasol release guidance on notes

By Rebecca Melvin

New York, Sept. 20 – Emerging markets debt saw another busy session on the primary side early Thursday, with guidance on offerings released by Saudi Electricity Co. and South Africa’s Sasol Ltd.

Sasol has guided pricing on a 5.5-year tranche to a yield in the low 300 basis points over U.S. Treasuries, and on a 10-year tranche to the high 300 bps over Treasuries.

Both tranches were expected to be benchmark size.

Saudi Electricity has guided pricing on $2 billion in sukuk, or Islamic bonds (expected ratings: A2//A) in five- and 10-year tranches, according to a market source.

The $800 million tranche that is due in January 2024 was launched at mid-swaps plus 115 bps, and the $1.2 billion 10-year tranche was launched at mid-swaps plus 160 bps.

Meanwhile, Dubai-based DP World Ltd.’s four tranches of bonds in multiple currencies that priced on Tuesday were outperforming the market, with a London-based trader saying that the bonds “have stabilized and were seeing demand.”

Overall the emerging markets debt market was seeing a solid tone on Thursday, the trader said.

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