Morning Commentary: EM debt spreads wider, hold within recent range; Ukraine edges up

By Rebecca Melvin

New York, Oct. 26 – Emerging markets debt spreads were wider in the early going on Friday but remained within their recent trading range despite this past week’s tumult in equity markets.

The spread on the J.P. Morgan U.S. dollar emerging markets sovereign bond index was at 394 bps on Friday, compared to 379 bps at the beginning of the week. That’s still below the most recent peak of 407 bps touched on Sept. 4, a New York-based market source noted.

Ukraine’s newly priced five-year and 10-year senior notes edged up in trade early Friday after the sovereign priced $750 million of the 9% 2024 notes and $1.25 billion of the 9¾% 2028 notes.

The new bonds were quoted at 100.3 in the early going after pricing with a new issue premium of 15 bps to 20 bps, according to a source.

“It was a decent sized book so not so surprising,” the London-based market source said.

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