Ghana’s $2 billion notes trade narrowly mixed; Egypt’s notes slightly tighter on the day

By Rebecca Melvin

New York, May 11 – The Republic of Ghana’s newly priced series of notes traded narrowly mixed on Friday. The new Ghana 7 5/8% notes due 2029 moved up to 100¼ bid, 100.40 offered after the sovereign priced $1 billion of the notes at par on Thursday, and the $1 billion of 8.627% notes due 2049 were seen both a little higher at 100½ bid, 100.80 offered, but also quoted lower at 99.87 bid, 100.3 offered, according to London-based sources.

The Ghana notes priced tight compared to talk, which started in the low 8% area for the 2029 notes and in the low 9% area for the 2049 notes.

The Rule 144A and Regulation S notes were sold via bookrunners BofA Merrill Lynch, Citigroup, JPMorgan and Standard Chartered.

Ghana was the latest of a string of African issuers of late, including Senegal, Angola, Kenya, Nigeria and Egypt. Egypt, which priced €2 billion of senior notes at par on April 9, was somewhat better on Friday. S&P upgraded the long-term foreign and local currency sovereign credit ratings of Egypt to B from B- on Friday. The agency affirmed the short-term foreign and local currency sovereign credit ratings at B.

The Egypt 4¾% notes due 2026, which priced on April 9, were quoted at 96¾ bid, 97¾ offered, with a spread that was tighter by 8 basis points on Friday. Its sister tranche, the Egypt 5 5/8% notes due 2030, were quoted at 96.62 bid, 97.62 offered, and the spread was in by 4.4 bps on the day.

Elsewhere in the Middle East & Africa region, the primary market was largely quiet, marking a shift from strong issuance in April and for the year to date. For the year and quarter overall, emerging markets new issuance is higher than the same periods of 2017. But for May so far, it has been reduced by about half, according to Prospect News’ data.

The crimp in new issuance is likely to continue at least for the near term. Next week the Muslim Ramadan holiday will begin, which is expected to sideline issuers from the MENA region.

Nevertheless, a couple of new issues were added to the forward calendar this week, including Commercial Bank of Qatar, which announced that Barclays, Standard Chartered Bank, BofA Merrill Lynch, Wells Fargo, QNB Capital and Al Khaliji are arranging a series of investor meetings ahead of a possible Regulation S five-year note of benchmark size. Also Africa-focused KEFI Minerals plc is planning a $160 million of listed infrastructure bonds.

Crude oil prices were up again on Friday, which has been the case this week following the Trump administration’s decision to pull out of the Iran Nuclear Accord. The barrel price of West Texas Intermediate crude for June 2018 deliver was up 0.85 cents, or $1.19, on the day, trading at $70.51.

Higher oil could help some emerging market credits and also portends potentially higher inflation, which could have a dampening effect on central bank rate raises.

Easing inflation fears have contributed to recent U.S. stock market gains. The Dow Jones industrial average gained on Friday, its seventh straight increase, leaving the index at 24,831.17, which was up 91.64 points, or 0.4%, on the day. For the week, the Dow is up 2.3%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.