Morning Commentary: Secondary flat to positive; Senegal softer; ChemChina, BankMuscat price

By Rebecca Melvin

New York, March 8 – The emerging market primary remained active on Thursday, while the secondary market was described as flat to slightly positive. Ongoing strength in new issuance is viewed as having generally hampered the secondary market, a London-based market source said.

“Any big orders move the needle,” the source said regarding the secondary market.

Senegal was softer in secondary trading after the sovereign priced €1 billion 10-year notes and $1 billion 30-year notes on Tuesday.

Among new issues, news on China National Chemical Corp. Ltd.’s (ChemChina) dollar tranches showed the Beijing-based chemical producer pricing not four but five tranches, contrary to initial talk.

ChemChina priced $4.95 billion of notes in three-, five-, seven-, 10- and 30-year tranches. Yield spreads came tight compared to initial talk.

In addition, Oman’s BankMuscat priced $500 million of 4 7/8% five-year notes at 99.2 to yield 5.058%, or mid-swaps plus 230 basis points. That pricing came tight compared to initial talk, which was for a yield in the mid-swaps plus 250 bps area.

Islamic Development Bank priced $1.25 billion five-year Islamic bonds to yield mid-swaps plus 33 bps, which was tight compared to initial talk in the high 30 bps area.

Al Ahli Bank of Kuwait joined with new issue pipeline with a mandate for a dollar-denominated perpetual bond, which is non-callable for five years.

Citigroup, HSBC and JPMorgan will organize investor meetings beginning on Thursday for the Regulation S deal.

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