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Morning Commentary: Tap of Angola 2048 notes launches at 9.1%; Dominican Republic trades well
By Rebecca Melvin
New York, July 16 – Emerging markets debt has shown signs of life in recent sessions despite an onslaught in recent weeks related to currency woes, U.S. dollar strength and international trade war worries among other things.
The Republic of Angola on Monday launched a $500 million tap of its 9 3/8% notes due 2048, with pricing expected later in the session.
The Angola deal launched to yield 9.1%, which was tight compared to initial price thoughts in the area of 9.3%.
Goldman Sachs International (global coordinator), Deutsche Bank and ICBC are joint lead managers and bookrunners for the Rule 144A and Regulation S deal.
In secondary action, a market player pointed to continued strength in the new Dominican Republic 6% notes due July 2028 that priced last Thursday.
“From a market standpoint, the Domrep deals tell us there is appetite to add exposure despite consecutive weeks of outflows. The deal is performing very well in the secondary,” the New York-based market source said.
The $1.3 billion 10-year deal priced at par on Thursday, on top of yield talk, and inside of guidance in the 6¼% area, sources said.
Also pricing last week for the Latin America region was a Cemig Geracao e Transmissao SA add-on to its 9¼% bonds due December 2024. Those bonds were also seen tighter in Friday trading.
The $500 million tap priced at 100½ on Thursday.
Whether these deals are deemed good indicators of favorable conditions in the new issue market, paving the way for other deals such as Empresas CMPC SA is “tough to say,” the source said.
It wasn’t obvious what variables Chile’s CMPC, a pulp and paper company, is monitoring for doing a deal, the source said.
There were no other announcements heard for Latin America so far this week.
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