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Morning Commentary: Ematum expected to restructure debt; Chinese bonds see ‘turbulent’ day
By Christine Van Dusen
Atlanta, May 29 – Mozambique’s Ematum was on radar screens on Friday on the news that the state-owned tuna-fishing company will likely restructure about $850 million in debt.
In response, the company’s 6.035% notes due 2020, which priced at 92.051 to yield 8½%, opened “wide and defensive,” a trader said.
The notes were seen at 95 bid, 96.5 offered, he said.
From Asia, much of the trading action on a “turbulent” day focused on investment-grade bonds from China, a London-based trader said.
The market opened unchanged, then sold off, then recovered to finish the Asian session unchanged to a few basis points wider, he said.
“China oils closed unchanged to 2 bps wider, with Cnooc Ltd.’s 2025s trading to wides of 153 bps and last up at 148 bps into the close,” he said.
The new issue of 3 7/8% notes due 2025 that Singapore-based Global Logistic Properties Ltd. priced on Thursday at 99.222 to yield Treasuries plus 185 bps traded on Thursday morning in the 188 bps range.
“Mostly flippers, closed at 187 bps bid, 184 bps offered,” another trader said.
China National Bluestar Group Co. Ltd.’s new $1 billion issue of senior notes due in 2018 and 2020 that priced on Thursday also saw some activity on Thursday.
The 2018s that priced at a spread of Treasuries plus 220 bps moved to 260 bps before closing at 260 bps bid, 257 bps offered.
The 2020s that priced at a spread of Treasuries plus 235 bps traded to a wide of 240 bps before rebounding to 236 bps and closing at 237 bps bid, 234 bps offered.
The bonds “had good retail demand after bonds dipped below reoffer,” he said.
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