Guatemala’s notes edge up in secondary; EM inflows continue; Norilsk Nickel prices deal

By Rebecca Melvin

New York, June 1 – Guatemala’s new notes found favor among investors on Thursday, as demand for emerging market debt remains strong and fund inflows continue, according to market sources.

Guatemala’s 4 3/8% notes due 2027 traded up by ¼ point to ½ point on Thursday after the Central American nation priced $500 million of the notes (//BB) at a discount to par of 99 on Wednesday.

The Guatemala paper was well received because this country has not issued new paper in a while, a syndicate source said. “It was a new name.”

In addition, the sovereign is viewed as one of the better credits in the region. While it is not a Mexico or a Chile, it is one of the better ones out of the region, the syndicate source said. The size of the book for this deal was more than $1.65 billion.

The prospects for Latin American debt continue to be solid despite some challenges in the region such as a corruption scandal that erupted around Brazilian President Michel Temer last month, which jeopardizes critical economic reforms for that country.

According to data collected by EPFR Global, emerging-market bond funds received inflows of $1.1 billion for the week ended May 24, marking the 17th straight week of net inflows.

As this week begins to close out, one of the markets in Latin America in focus is Mexico where state elections will be held June 4.

There will be more clarity on Mexico after the elections, a market source said. But in general, Mexico has been “a more orthodox” government during the commodity boom. It has not been commodity driven like Brazil but has instead been manufacturing driven, the source said.

Elsewhere in the primary market, Russia’s OJSC MMC Norilsk Nickel priced $500 million of 3.85% five-year bonds at par Thursday. Latvia priced €350 million of notes in add-ons to existing tranches due in 2026 and 2036. And Maldives debuted in the sovereign debt arena with a $200 million issue of 7% five-year notes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.