Morning Commentary: EM markets ‘a bit soggy’; some potential issuers look at postponing deals

By Rebecca Melvin

New York, Nov. 15 – Emerging markets remained soft early Wednesday as a more defensive tone that began to sound last week continued. A few deals continue to trickle through, but there are issuers in the pipeline that have decided to postpone their offerings until next year, a London-based market source said.

“There are a couple of issuers that will wait until first-quarter 2018,” the source said, adding that if funding can wait it’s best to be patient.

The market is “defensive and a bit soggy,” the source said.

But the window for new issuance before year-end would be starting to close regardless of market tone simply given the calendar.

Anyone going to market should try to do it before next Tuesday ahead of the Thanksgiving holiday in the United States, the source said. “After that, there is about one week to execute before year-end and that is the week of Nov. 27. The Dec. 4 week people begin to close up their books, and then the [Federal Reserve’s Open Market Committee] meeting is scheduled Dec. 13.”

One of the issuers on the calendar likely to execute the week of Nov. 27 is Emirates SembCorp Water & Power. The company is on an extended roadshow for a $400 million offering of senior secured notes due 2035.

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