Spreads a bit tighter for Turkey sovereign curve, banks; Inkia reopens 5 7/8% notes; Alpha Holding expected Tuesday

By Rebecca Melvin

New York, Dec. 11 – Emerging market flows were muted on Monday as market players kept an eye on rates ahead of meetings this week of the Federal Reserve, the European Central Bank and the Bank of England.

There was a bit of spread tightening in both the sovereign curve and financial credits of Turkey despite a bid in U.S. Treasuries in the early going, a market source said.

The Turkey sovereign curve was about 4 basis points to 5 bps tighter, and the banks were also tighter while somewhat mixed in other parts of Turkish debt.

Good data for Turkey’s gross domestic product and current accounts were supportive amid a lack of other headlines for the space, the market source said.

U.S. Treasuries moved higher in the early session amid headlines that an explosive device had been set off in the New York City subway system near Times Square. But Treasuries changed direction later on as it became understood that a terrorist attack had been averted and the man who detonated the device only injured himself and three others.

Yields have been on the rise in recent sessions, but have traded largely in a range. Rate raises are expected by the central banks this week. Another rate raise by the Federal Open Market Committee meeting on Wednesday would bring the federal funds rate in a range of 1.25% to 1.5%, assuming that another 0.25% hike is implemented.

According to Fed economic forecasts, policymakers expect three additional rates hikes in 2018, which would bring the benchmark rate to between 2% and 2.25% by the end of next year.

Inkia Energy Ltd. priced a $150 million add on to its 5 7/8% 10-year senior notes (expected rating: /BB/) on Monday at par, according to a market source.

The original $450 million of notes priced on Nov. 9.

Credit Suisse and Deutsche Bank were joint bookrunners of the issue, the proceeds of which are expected to be used for financing of the 1 Squared Capital acquisition of Inkia.

India state-owned Rural Electrification Corp. Ltd. priced $400 million of 3.068% three-year notes (ratings: Baa3//BBB-) at par on Monday to yield U.S. Treasuries plus 115 basis points, according to a market source.

ANZ, Barclays, Mizuho Securities and MUFG were the joint bookrunners for the Regulation S notes.

Proceeds will be used for refinancing external commercial borrowings in compliance with regulations for Indian issuers tapping international markets.

Elsewhere pricing of the dollar-denominated notes offering of Mexico’s Alpha Holding SA de CV wasn’t expected until Tuesday, according to a syndicate source.

Alpha Holding wrapped up a roadshow on Friday for the Rule 144A and Regulation S deal, which was on the market’s radar for pricing on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.