Commercial Bank of Qatar new notes little changed; Turkey flat to lower; Argentina lower

By Rebecca Melvin

New York, May 18 – Commercial Bank of Qatar’s newly priced 5% notes closed little changed on Friday after the Doha-based lender’s $500 million of the 2023 notes priced at the tight end of guidance and were released for trading in the secondary market.

The bank’s notes were quoted at 99 3/8 bid, 99.45 offered, which was up only about 10 cents from a reoffer price of 99.311, according to a London-based trader.

The bonds priced with a yield spread of 212.5 basis points over mid-swaps, which was the tight end of guidance of mid-swaps plus 225 bps, plus or minus 12.5 bps, and tightened from initial price talk at mid-swaps plus 237.5 bps.

Emerging market debt continued to suffer this past week as the 10-year Treasury yield climbed above 3.10%, buoying the dollar.

The 10-year Treasury yield reached its peak and pulled back some on Friday, but the dollar rose again against many emerging-market currencies. The dollar is rising on expectations that U.S. yields will continue to go up. The dollar’s strength pushed the Turkish lira to an all-time low of 4.49 to the dollar.

Turkey’s newer 6 1/8% notes due 2028, of which $2 billion priced in mid-April, were quoted at 91.70 bid, 92.05 offered, which was flat to lower from Wednesday, when the bond fell to 92 from 95. On Monday, the 6 1/8% notes were 95.452, which was down 0.8% on the day. The paper, which priced at a reoffered 99.427, is now down 8% from issue.

Investors were spooked this week by President Recep Tayyip Erdogan’s pronouncements that he is ready to usurp more control of the country’s central bank if he feels it necessary.

Argentina’s $2.75 billion 7 1/8% notes due 2117, which have performed in line with the sovereign’s overall yield curve, were down 0.95, or 1.1% on the day at 86.10. That is off its all-time low of 82 but nowhere near its high of 104 notched last fall. The paper was issued at a reoffered 90 in June 2017.

The sovereign has sought help from the International Monetary Fund to help it stem economic problems sparked by its currency decline. On Friday, the IMF talks moved to the formal phase as the executive board was presented with a plan that was endorsed by the United States, according to reports. But further negotiations on details of the credit line, known as an exceptional access standby arrangement, need to take place between Argentina and the IMF.

There was little news by way of updates on deals on the new issue calendar that had been on roadshows this week, including Afreximbank, which planned to price dollar five- or seven-year notes at the conclusion of fixed-income investor meetings that began on Monday, or Israel Chemicals Ltd., which planned to price dollar 20- to 30-year notes and began roadshow meetings on Tuesday.

In addition, Poland’s Bank Gospodarstwa Krajowego is on the calendar, having mandated banks and scheduled fixed-income investor meetings for euro-denominated seven- and 12-year notes, and Chile’s Empresas CMPC SA has selected banks and scheduled fixed-income investor meetings for a planned offering of dollar-denominated notes of intermediate duration.

© 2015 Prospect News.
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