Turkey’s Sisecam, Quito Airport price; secondary weaker as investors eye growth

By Rebecca Melvin

New York, March 8 – Emerging-markets debt market saw further new supply on Friday from Turkiye Sise ve Cam Fabrikalary AS with $550 million of 6.95% seven-year notes and Corporacion Quiport SA with $400 million of 12% notes due 2033.

Turky’s Sisecam deal priced at par late Thursday and Quito Airport priced at par on Friday.

Turkey’s Yapi ve Kredi Bankasi AS (Yapi Kredi) was also expected to price $500 million of five-year notes to yield in the 8¼% area, but final terms were not heard by Prospect News’ deadline.

Neither were terms heard for Russia’s EuroChem Group AG, which was expected to price a U.S. dollar-denominated benchmark offering of five-year notes. But the Moscow-based fertilizer company announced on Thursday the results for its tender of dollar 2020 and 2021 notes was completed. Holders tendered $375,872,000 of the 2020 notes and $371,954,000 of the 2021 notes. Both issues were $500 million in size.

In the secondary market, bonds were under pressure as investors eyed negative economic data and news, including the U.S. jobs report for February on Friday, which showed nonfarm payrolls rose a seasonally adjusted 20,000 for the month, the slowest monthly hiring pace since September 2017. While the low number potentially portends slowing economic activity, the unemployment rate dropped to 3.8% in February from 4%.

The Labor Department data came on the heels of central bank news this week including the European Central Bank’s 2019 growth forecast cut and introduction of new stimulus measures.

When asked if Qatar’s mega $12 billion triple tranche deal that priced midweek had any impact on the market’s surfeited demand, a New York-based market source said, “It’s not Qatar; it’s the EBC, China trade, and the jobs report.”

In fact, the market’s tepid tone began on Monday when there were some sellers of emerging markets debt, leaving the market with a lightly mixed tone.

There was ongoing pricing pressure on Petroleos Mexicanos SAB de CV, which was downgraded by S&P on Monday. S&P revised the stand-alone credit profile on the heavily-indebted state-owned oil company to B- from BB-, and downgraded the global scale rating outlook to negative from stable, citing deterioration of the company's business and financial risk profiles.

Pemex’s 6½% 2029 notes were off another 0.2 point to 0.3 point on Friday to around 95.3. Those notes dropped on Monday and Tuesday, but lifted slightly on Wednesday and Thursday.

On the calendar for next week is Dubai-based Emirates NBD Bank PJSC announced an offering of additional Tier 1 perpetual notes that it plans to price following a roadshow with fixed-income investors.

The notes are non-callable for six years.

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