Colombia taps market for $1.5 billion; bonds from India, Korea see demand; Turkey quiet

By Christine Van Dusen

Atlanta, Sept. 21 – Colombia sold notes on Monday as investors evaluated the implications of the previous week’s Federal Open Market Committee meeting.

“After the Fed hold-off on hiking in its FOMC meeting last week, the focus will be on emerging markets central banks this week, including in Turkey, Morocco, Nigeria, Kenya and South Africa,” a trader said.

Bonds from Turkey were quiet on Monday morning, following Fitch Ratings' affirmation of the sovereign's stable rating on Friday, which pushed “fears of a downgrade further down the road,” a London-based trader said.

Turkey will hold a snap election on Nov. 1, during which the Justice and Development Party (AK Party) is “still not likely to win back the majority in parliament,” another trader said.

Flows for Turkish banks were two-way on improved valuations, the London trader said.

“We do not think the banks will issue at current levels, as they are currently seeing subdued demand for dollar loans with the unclear political outlook, weak [currency] and potentially expensive issuance levels,” he said.

From Asia, bonds were firm, despite weakening equities, a trader said.

“Broader investment-grade cash closed the day unchanged to 2 basis points tighter while recent issues were a couple wider,” he said. “Flow was quiet in the morning, with a Japan holiday, but during the afternoon session we saw better buyers of risk.”

Notes from Korea were firm, he said, with Woori Bank Ltd.'s 2020 trading up.

“India outperformed, with the sector 1 bp to 3 bps tighter, and had good demand in both five-year financials and 10-year corporates,” he said.

Asia mixed

Later in the day, sentiment was mixed, with weakness in the long end of Indonesia's curve and firmness for Chinese corporates, another trader said.

“India and Korea corporates continue to see decent demand, especially in the less-than-10-year front,” he said. “China high-yield had paper coming out in properties.”

Lat-Am in focus

Looking to Latin America, investors were eyeing Brazil after the currency on Friday “had a very scary close,” a New York-based trader said.

“The local market was full of rumors of a downgrade by Moody's that finally did not happen, yet,” he said. “The [real] opens weaker again after a very bad Friday. The currency is trading now well above 2002 lows. Sovereign bonds are virtually bidless.”

Spreads moved wider in the afternoon, as weakness in currencies and Treasuries overshadowed any bounce in equities and commodities, another trader said.

Brazil's five-year credit default swaps spreads traded at 429 bps from Friday's 398 bps, while Mexico's widened to 428 bps from 398 bps.

“Cash prices in the low-beta space moved lower throughout the session as the market adjusts to a back-up in U.S. rates,” he said.

Colombia prints dollar notes

Colombia sold $1.5 billion notes due in January 2026 to yield Treasuries plus 245 bps, a market source said.

The notes were talked at a spread in the 262.5 bps area.

BofA Merrill Lynch and Credit Suisse were the bookrunners for the Securities and Exchange Commission-registered deal.

The proceeds will be used for general budgetary purposes.

Other details were not immediately available on Monday.

Bancomext sets roadshow

Mexico’s Banco Nacional de Comercio Exterior, Sociedad Nacional de Credito, Institucion de Banca de Desarrollo (Bancomext) will set out Wednesday for a roadshow to market a dollar-denominated issue of notes, a market source said.

BofA Merrill Lynch and HSBC are the bookrunners for the Rule 144A and Regulation S deal.

The roadshow will start off in New York and Santiago and then travel to Boston before concluding on Friday in London and Los Angeles.

Bancomext is a state-owned bank based in Mexico City.

ADCB picks bookrunners

Abu Dhabi Commercial Bank PJSC has mandated Barclays, BofA Merrill Lynch, ING and JPMorgan as bookrunners for a new issue of notes, according to a company filing.

The Regulation S notes will be issued via ADCB Finance (Cayman) Ltd.

Other details were not immediately available on Monday.

Promsvyazbank plans issuance

Russia’s OJSC Promsvyazbank is looking to issue $100 million in bonds due in 10 years, a market source said.

The company’s board approved the issuance at a meeting on Sept. 18.

Other details were not immediately available on Monday.

Promsvyazbank is a Moscow-based lender.

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