Turkish bank, Saudi Arabia ponder issuance; Gildemeister, Pacific Rubiales get attention

By Christine Van Dusen

Atlanta, April 2 – Turkey’s Turkiye Sinai Kalkinma Bankasi AS and Saudi Arabia considered future issuance on a slow Thursday for emerging markets assets against the backdrop of a decline in weekly initial jobless claims from the United States.

Asian credits remained firm, with high-grade cash bonds closing unchanged on the day, a London-based trader said.

“Flow was slower ahead of Easter holidays, but we had good two-way flow, with accounts looking to profit-taking after the U.S. Treasury rally,” he said.

From Latin America, Brazil’s Oi SA was in the news after cutting more than 1,000 jobs as part of a plan to reduce costs and improve profitability and productivity.

“In terms of Brazil’s economic decline and [currency] depreciation, it is a positive move from the company’s management,” according to a report from Schildershoven Finance BV. “Investors should be cautious about the company, as the economic situation in the region may become worse.”

Investors were also watching Chile’s Automotores Gildemeister SA, which is expected to default, given the decline in the currency and the economic downturn.

That sent the company’s bonds down 7%, Schidershoven said.

Brazil’s Pacific Rubiales Energy Corp. saw more selling than buying of its bonds on Thursday, a trader said.

“But oil is bouncing back,” he said.

This followed the news that Standard & Poor’s knocked Pacific Rubiales down to BB/negative from BB+/watch negative and that the company could soon meet with investors.

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