Israel announces; Puerto Rico bonds improve with sales tax deal; primary remains dormant

By Paul A. Harris

Portland, Ore., Aug. 9 – With the emerging markets new issue market practically in hibernation, Israel announced a €10 billion medium-term note program on Thursday.

Barclays is the arranger and also a dealer alongside BNP Paribas, BofA Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs International, Morgan Stanley and UBS Investment Bank.

Proceeds from notes issued under the Regulation S program will be used for general financing purposes.

Elsewhere the primary market is expected to remain dormant during the run-up to Labor Day, a New York-based syndicate banker said.

Puerto Rico up on deal

The prices of Commonwealth of Puerto Rico bonds improved on Thursday following Wednesday’s news that the government reached an agreement with sales tax bondholders, a market source said.

The deeply distressed Commonwealth of Puerto Rico 8% Series 2014A general obligation bonds due July 2035 traded in the mid 50s on Thursday, after trading in the low-to-mid 40s earlier in the week, the source said.

A debt restructuring would see the commonwealth save $17.5 million in interest payments, the source said.

Senior debt holders would see a recovery of 93 cents on the dollar, while subordinated debt holders would see 56 cents on the dollar.

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