Slovakia, MAF, Oman, Bank of Sharjah ahead; Nigeria, Angola, others perform; Ukraine lags

By Christine Van Dusen

Atlanta, Feb. 24 – Emerging markets assets put in a calm session on Friday following a rally in the U.S. Treasury curve and little in the way of alarming political news from around the globe.

“It’s a calm day ahead of the weekend, and so far, it has been remarkably calm from United States politics this week,” a London-based analyst said. “That said, yesterday’s comments by Treasury Secretary Mnuchin revived some speculation on a corporate tax reform.”

Against this backdrop, Slovakia and Dubai’s Majid Al Futtaim Holding LLC set roadshows, Oman named bookrunners and United Arab Emirates-based Bank of Sharjah revived plans for a deal.

Investors were keeping an eye out for the upcoming issue of about $500 million of bonds from Nigeria.

“According to the budget office, the 2017 budget might be approved by end-March and will also include new eurobonds,” the analyst said. “In total, Nigeria was looking to raise $3.5 billion of commercial and concessional debt abroad for next year’s budget. Interestingly, the Environment Ministry then stated that the government was also planning to tap the green bonds or sukuk market, initially in the local currency market, but a FX-denominated transaction could follow soon after.”

Earlier this month the sovereign priced $1 billion of notes due in 2032 at par to yield 7 7/8%, following talk in the 8˝% area.

Also at the end of the week, spreads were mostly unchanged for most emerging markets assets, a trader said.

“Amid a risk-off in the developed markets, the backdrop for EM credit remains supportive on the back of inflows and a lack of meaningful drivers from U.S. politics,” he said. “While rates was the main driver, spreads remained unchanged on balance.”

More names outperform

The week’s outperformers were high-yielders, including Mongolia – which recently secured a $5.5 billion bailout – and Angola, Egypt, Nigeria, Zambia, Venezuela and Ecuador. Ukraine was the notable underperformer, the trader said.

“It is not easy to make something out of the current market environment,” he said. “With the recent risk-off in developed markets, EM credit benefits from potentially lower developed market rates for longer, but there is a chance that European politics could weigh on market sentiment to a larger extent. Other key drivers naturally include US politics, with Trump addressing the joint session of Congress on Tuesday and previously having promised a ‘phenomenal’ corporate tax reform announcement within the next few weeks.”

Recent inflows, which have been solid, “undoubtedly remain the offsetting factor, but the mood could change swiftly in the next few days,” he said.

Slovakia sets roadshow

Slovakia will set out on Monday for its roadshow to market a euro-denominated and benchmark-sized issue of long-dated notes, a market source said.

Deutsche Bank, HSBC, Societe Generale CIB and Raiffeisen International Group are the bookrunners for the Regulation S deal.

Roadshow for MAF

Dubai’s Majid Al Futtaim has scheduled investor meetings to market a benchmark-sized issue of dollar-denominated perpetual bonds, a market source said.

The roadshow will take place next week in Asia and Europe.

HSBC, Standard Chartered and National Bank of Abu Dhabi are the bookrunners for the deal.

The company is a Dubai-based conglomerate.

Oman names bookrunners

Oman has mandated Alizz, Citigroup, Dubai Islamic Bank, Gulf International Bank, HSBC, JPMorgan and Standard Chartered Bank as bookrunners for its issue of up to $2 billion of five-, 10- and 30-year notes, a market source said.

The proceeds from the issue will be used to address the sultanate’s budget deficit.

A roadshow for the Rule 144A and Regulation S deal started Friday.

Bank of Sharjah could price

United Arab Emirates-based Bank of Sharjah could print its benchmark-sized issue of dollar-denominated notes due in five years as soon as next week, a market source said.

The issuer previously delayed pricing the deal.

Bank ABC, Emirates NBD Capital, JPMorgan and National Bank of Abu Dhabi are the bookrunners for the Regulation S transaction.

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