Morning Commentary: Dubai Investments Park cancels deal; EM debt pulls back slightly

By Rebecca Melvin

New York, Jan. 30 – The emerging markets debt market lost a little ground on Wednesday ahead of the U.S. Federal Reserve’s update on monetary policy expected later in the session, following its regularly scheduled two-day meeting, according to market sources on Wednesday.

A deal on the primary calendar for the Middle East and Africa region was canceled, a London-based market source noted, and trading was subdued, he added.

Dubai Investments Park Development Co. LLC’s planned five-year dollar sukuk was pulled due to the “availability of more attractive funding alternatives for refinancing their outstanding notes,” a syndicate source said.

“The issuer will continue to monitor markets and looks forward to re-engaging with investors at an appropriate time,” the syndicate said.

The Dubai-based development company had planned a benchmark-sized sukuk to be priced via subsidiary DIP Sukuk 2 Ltd.

In Latin America, although there have been pricings this week, including a $1 billion issue of 10-year notes for the Republic of Ecuador, there are a couple of deals on the primary calendar that may hold off now until next week to price.

Chile’s Latam Airlines Group SA’s planned dollar-denominated notes (expected rating: //B+) was heard to be eyeing next week for pricing after three days of fixed-income investor meetings this week, and Mexico’s Credito Real SAB de CV Sofom ER was said to be monitoring markets regarding its planned dollar-denominated intermediate notes.

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