Morning Commentary: EM credit opens on firm footing; Nigeria’s $3 billion notes look ‘cheap’

By Rebecca Melvin

New York, Nov. 20 – Emerging credit markets opened on firm footing on Monday with higher underlying rates and stabilizing oil prices lending support, according to a market source.

Turkey’s sovereign bonds were an exception to generally solid markets, with the curve trading 7 basis points to 10 bps wider on the day and with greater weakness in the nearer-dated paper.

Depreciation in the Turkish lira was cited as an exception among major EM currencies and down 0.9% to 3.90 to the U.S. dollar, according to MUFG strategist Trieu Pham in a note early Monday.

The primary saw a launch by the Federal Republic of Nigeria for $3 billion in 10- and 30-year eurobonds (expected ratings: B/B+) that were seen as cheap, according to one market source, at yields of 6˝% and 7 5/8%, respectively.

Final pricing of the two $1.5 billion tranches was expected later Monday.

Export-Import Bank of China (Chexim)’s two tranches of euro- and dollar-denominated notes were expected to be benchmark size of no smaller than $300 million each with terms expected early Tuesday.

Bank of China, Bocom HK Branch, Barclays, Credit Agricole CIB, MUFG, China Construction Bank (Europe) SA, DBS Bank, ING Bank, KGI Asia, Mizuho Securities Asia and Westpac Banking are joint lead managers and joint bookrunners for the deal.

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