Petrobras slips with oil, Senate vote; Cyprus prices notes; Qatar struggles with sanctions

By Rebecca Melvin and Colin Hanner

New York, June 20 – Another drop in global oil prices was a focus in emerging markets on Tuesday. But as oil slipped into bear market territory amid concerns about a global oil glut, it was not the only culprit for market weakness, sources said.

In Brazil, the Senate rejection of a labor bill added to pressure on Brazilian assets, a New York-based economist said.

Petroleo Brasileiro SA’s 6.85% notes due 2115 – its 100-year bond – was down to 86.95 on Tuesday, compared to 87.75 on Monday. The yield is still below 8%, the economist noted.

Sovereign issuers were taking the bulk of attention with Cyprus and Russia expected to come to market, market sources said.

Cyprus priced €850 million of 2¾% seven-year notes at 99.686 to yield 2.8%.

In the corporate new issue space, South Africa mining company Sibanye Gold Ltd. priced $1.05 billion of bonds (Ba2/B+) in two tranches.

Also in corporate action, Turkiye Is Bankasi AS (Isbank) was expected offer a dollar-denominated benchmark Rule 144A and Regulation S tier 2 offering (B1//BB) of notes following a morning investor call on Tuesday.

In the Middle East, developments continued to unfurl in and around Qatar, though comments from all sides “have likely rather complicated the situation and point towards a longer stand-off,” a market source said.

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