Morning Commentary: Hungary launches €1 billion seven-year notes; Argentina weakens

By Rebecca Melvin

New York, Sept. 25 – The Republic of Hungary launched a €1 billion offering of seven-year notes, for which pricing was tightened during bookbuilding for a yield spread of mid-swaps plus 75 basis points, according to a market source.

Pricing was tightened from guidance of mid-swaps plus 85 bps and initial price talk of mid-swaps plus 100 bps. The order book at launch stood at more than €3.8 billion.

Initial price guidance was very appealing for investors. Hungary’s 2027 notes were trading at 73 bps over mid-swaps, and the Hungary 2029 notes were at 70 bps over mid-swaps, compared to Romania’s 2025 notes, which were trading around 92 bps over mid-swaps.

Hungary was last in the market last October for €1 billion 1¾% notes due 2027.

Argentina’s bonds were under pressure early Tuesday and down a point or more in general, a New York-based trader said.

The bonds started to drop back on Monday amid reports that the nation is close to clinching a larger loan from the International Monetary Fund and president Mauricio Macri’s statement that there is “zero chance” Argentina would default on its debts next year.

The pullback is coming on the heels of a rally for much of September after Argentina’s debt and its currency sunk to lows at the end of August.

The Argentina 5 7/8% dollar notes due 2028 were around 80 after touching 81.5 on Monday.

Investors are worried that even it more IMF funding is forthcoming, it doesn’t change the challenges that face Macri in reforming the economy and maintaining support ahead of the next presidential election slated for October 2019.

Meanwhile, Venezuela’s bonds were unchanged with low liquidity on the heels of new U.S. sanctions announced on Tuesday against Venezuelan president Nicolas Maduro and his inner circle, including his wife, first lady Cilia Flores, vice president Delcy Rodriguez, communications minister Jorge Rodriguez and defense minister Vladimir Padrino.

© 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.