EM debt better after Turkey’s rate hike; new issues trade well; GCC in focus next week

By Rebecca Melvin

New York, Sept. 14 – Emerging markets debt closed out the week on a positive note Friday as investors turned sanguine on the heels of Turkey’s central bank rate hike and an encouraging tone regarding U.S.-China trade ahead of planned high-level talks.

The new issues that were priced this week, including four from the Gulf countries, priced well and traded up after issue, a market source said.

Saudi Arabia priced a $2 billion 10-year sukuk, or Islamic bond, at 99.997 for a yield of 4.304%, or spread of mid-swaps plus 127 basis points.

The new Saudi sukuk added about 0.25 point in first-day trading, quoted at 100¼ bid, 100.30 offered and pushing its spread to 123 bps on the day.

That paper came on the heels of Arab Petroleum Investments Corp.’s new $750 million of 4 1/8% five-year senior notes, Abu Dhabi Islamic Bank’s $750 million of tier 1 perpetual notes and Abu Dhabi-based Al Hilal Bank’s $500 million of 2023 sukuk.

Their performance bodes well for a new crop of GCC debt issues next week. DP World Ltd. plans to price a dollar-denominated 10-year sukuk and a possible 30-year bond; Saudi Electricity Co., Islamic Development Bank and Aldar Properties PJSC all announced that they are preparing dollar-denominated sukuk; and the National Bank of Oman plans to issue a dollar-denominated note.

© 2015 Prospect News.
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