Dollar rally sparks EM debt selloff; Angola prices $3 billion; LatAm holds off on deals

By Rebecca Melvin

New York, May 3 – A strengthening U.S. dollar has sparked renewed selling in EM credit this week, exacerbating a drop in the emerging market sovereign bond index since the end of March, a New York-based analyst said on Thursday.

Meanwhile in primary market action, the Republic of Angola priced $3 billion of notes due 2028 and 2048 on Wednesday.

The $1.75 billion tranche of Angola 8¼% 10-year notes priced at 99.987 to yield 8¼%, or a yield spread of 528.6 basis points over U.S. Treasuries. Pricing was tightened from initial talk in the 8½% area.

And the $1.25 billion of Angola 9 3/8% 30-year notes priced at 99.976 to yield 9 3/8%, or a yield spread of 625.1 bps over Treasuries, with pricing tightened from initial price talk in the 9 5/8% area.

Veszprem, Hungary-based fertilizer producer Nitrogenmuvek Zrt. also guided pricing for its €200 million offering of seven-year notes to yield 7%.

But for the Latin America region, a calendar of new deals remained on pause mode as markets contend with a dollar rally that has seen the greenback gain nearly 4% against a basket of the mostly traded currencies, in the last two weeks.

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