South Africa’s new Sasol notes edge up; new Saudi Electricity notes trade little changed

By Rebecca Melvin

New York, Sept. 21 – Four new tranches of notes for $4.25 billion debuted in the Middle East and Africa region on Friday.

The $2.25 billion of South Africa’s Sasol Ltd. notes edged up in trade, with the mining, energy and chemical company’s $1.5 billion 5.5-year tranche seen at 100¾ bid, 101 offered in the early going after the issue priced at 99.852.

The Sasol $750 million 10-year tranche traded at 100.62 bid, 100.87 offered after the deal priced at 99.869.

Saudi Electricity Co.’s $2 billion trust certificates or Islamic sukuk were trading little changed after pricing at par and were quoted at 99.95 bid, 100.05 offered for both tranches – a $800 million five-year tranche due in January 2024 and a $1.2 billion 10-year tranche.

Overall emerging markets debt has been performing better with strong issuance for the last two weeks. There were no deals heard yet for pricing next week. There is a Federal Open Market Committee meeting on the calendar for next week that might douse new issuance temporarily.

The primary market was busy this past week, with much of the new paper still concentrated in the Middle East and Africa region, but Suzano Papel e Celulose SA, representing the first new deal for Latin America in two months, priced as well.

The emerging markets debt market welcomed two new issues on Tuesday. The Republic of Cyprus priced €1.5 billion of 2 3/8% 10-year notes on Tuesday at 99.780 for a yield of 2.4%.

National Bank of Oman was also in the market for a five-year benchmark of dollar bonds that were being talked at mid-swaps plus 275 basis points plus or minus 5 bps, according to a market source on Tuesday. Dubai’s DP World Ltd. priced four tranches of bonds in multiple currencies on Wednesday including a $1 billion 10-year sukuk and a $1 billion 30-year note as well as smaller euro and pound sterling-denominated notes.

Inter-American Development Bank also priced a £150 million tap of its 1¼% notes due 2023, and pricing emerged on China Construction Bank Corp. Hong Kong Branch’s $1 billion of three-year floating rate notes that priced at par to yield Libor plus 75 bps.

Pricing also emerged on Islamic Development Bank, which priced $1.3 billion of five-year Islamic bonds at par with a profit rate of 3.389%, or mid-swaps plus 32 bps, according to a syndicate source on Thursday.

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