Saudi Arabia brings historic deal; EM gets lift from China data, oil; Polyus Gold eyes notes

By Christine Van Dusen

Atlanta, Oct. 19 – Saudi Arabia brought its long-awaited, three-tranche, $17.5 billion megadeal – the largest ever from an emerging markets issuer – on Wednesday amid higher oil prices and supportive data from China that gave a boost to bonds from Central and Emerging Europe, the Middle East and Asia.

“Historic day,” a London-based trader said. “We’ve certainly never seen $17.5 billion-worth of bonds added.”

The notes – Saudi Arabia’s first-ever international bonds – were issued as a means to address a budget shortfall for the sovereign, which relies on oil for more than half of its government revenue and has been suffering amid oil-price volatility.

Meanwhile, bonds from Oman and Bahrain rallied as value-hunters picked out bonds that looked cheap to the expected pricing and size of Saudi Arabia.

In other trading, the new issue of notes from Export Credit Bank of Turkey SA (Turk Eximbank) – $500 million 5 3/8% notes due 2023 that priced Tuesday at 99.816 to yield mid-swaps plus 400 bps – saw some activity in trading on Wednesday.

The notes were spotted during the session at 100.05 bid, 100.15 offered, a trader said.

In other news, Polyus Gold International Ltd. is planning to issue dollar-denominated notes due in five years, according to a company announcement.

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