Morning Commentary: Qatar tranches edge up in trade; South Africa’s Eskom notes gain

By Rebecca Melvin

New York, March 7 – Qatar’s newly priced tranches edged up by ¼ point or less on Thursday after the state printed $12 billion of notes due 2024, 2029 and 2049.

The $2 billion tranche of 3 3/8% five-year notes was quoted at 100.06 bid, 100.10 offered by a trader in London near the end of Europe’s trading session. The notes priced at a reoffered 99.89 to yield 3.399%, or U.S. Treasuries plus 90 basis points, which was tight compared to initial price talk of Treasuries plus 110 bps.

The $4 billion tranche of 4% 10-year notes was quoted at 100.12 bid, 1001.8 offered, and the $6 billion tranche of 4.817% 30-year notes was quoted at 100.15 bid 100.25 offered.

The 10-year notes priced at 99.649 to yield 4.043%, or a spread of Treasuries plus 135 bps, which was tightened from initial price thoughts of Treasuries plus 160 bps. And the 30-year notes sold at par to yield Treasuries plus 175 bps.

The ultra large Qatar debt deal saw eye-popping demand of more than $50 billion, according to sources.

Elsewhere South Africa’s Eskom Holdings SOC Ltd.’s bonds jumped as investors cheered the news that the loss-making utility was granted permission by the country’s energy regulator to raise its rates 9.41%, 8.1% and 5.2% for the next three years, respectively.

The Eskom 2028 notes jumped 2.5 points to 108 and the Eskom 2025 notes rose 1.4 points to 101.25, according to market sources.

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