IDB sells notes; investors await U.S. data; Lat-Am spreads tighten; Montenegro plans deal

By Christine Van Dusen

Atlanta, March 3 – Islamic Development Bank advanced a deal on Thursday during a mixed session for emerging markets assets, as investors awaited the Friday release of non-farm payrolls data from the United States.

“Equity markets, bond yields and commodity prices are mixed in European trading following strong gains in the first part of this week,” according to a report from Barclays Capital.

In trading on Thursday, the new issue of notes from Turkey – $1.5 billion 4 7/8% notes due 2026 that priced Wednesday at 98.977 to yield 5% – traded slightly below reoffer.

The notes were spotted at 98.80, a trader said.

BofA Merrill Lynch, Citigroup and Deutsche Bank were the bookrunners for the Securities and Exchange Commission-registered deal.

“The Turkey sovereign is not really setting the world on fire,” another trader said.

Looking to Latin America, spreads tightened and cash prices moved higher, with Brazil an outperformer amid positive political developments, a New York-based trader said.

Brazil’s five-year credit default swaps spreads tightened to 422 basis points from 449 bps, while Mexico’s moved to 177 bps from 184 bps.

“Cash prices continue moving higher as spread tightening and a back-end U.S. Treasury rally has bonds bid throughout the session,” he said. “Latin American high yield finishes mixed on the day.”

Venezuela’s 2027s closed at 41 from 41.75, while PDVSA’s 2017s closed at 54 from 53.75.

“Volumes and two-way flow continue to be very active as we consolidate and move higher,” he said. “Tomorrow all eyes will be on payrolls and, more specifically, on wage data as we look to the Fed and European Central Bank later on this month for any indication of the next move in global markets.”

IDB sells notes

In its new deal, Islamic Development Bank priced a $1.5 billion issue of notes due in 2021 at a spread of 50 bps over mid-swaps, a market source said.

The notes priced at the tight end of talk, set at 50 bps to 55 bps.

Boubyan Bank, CIMB, Emirates NBD, Gulf International Bank, JPMorgan, Natixis and Standard Chartered were the bookrunners for the Regulation S deal.

Other details were not immediately available on Thursday.

Koc sets roadshow

Turkey’s Koc Holding AS will set out on Friday for a roadshow to market a benchmark-sized issue of dollar-denominated notes, a market source said.

The roadshow will end on March 9.

Other details were not immediately available on Thursday.

The Istanbul-based industrial conglomerate previously announced plans for up to $1 billion of bonds this year.

Koc could acquire

Koc currently has a $750 million 2020 eurobond outstanding, which trades at 4½%, representing a basis of 55 bps over the sovereign, a trader said.

“We expect that [Koc] seeks to explore acquisitions abroad,” he said.

This could help the company get further ratings upgrades, he said.

Montenegro plans issuance

Montenegro is planning to issue euro-denominated notes with bookrunners Deutsche Bank, Citigroup, Erste Group and Societe Generale CIB, according to a filing from the sovereign.

The deal will be a Rule 144A and Regulation S transaction.

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