Pemex launches $5 billion deal; EM sees better volumes, buying, spreads; HNA advances deal

By Christine Van Dusen

Atlanta, Jan. 28 – Mexico’s Petroleos Mexicanos SAB de CV (Pemex) brought new notes on a Thursday that saw good volumes, better buyers and tighter spreads, even as the big picture remained iffy.

“This time last week, EM investors were asking themselves the question, ‘when will this market find support?’ We were in a proper death spiral that was pushing for eight days straight,” a London-based trader said. “China growth, oil, with a sprinkling of liquidity fears, kept the buyers at bay and sellers pushing the market lower into no bid. What a difference a week makes.”

Though oil prices remain volatile and China remains a concern, “EM spreads continue to crunch back in,” he said. “Even the market’s favorite underweight, the Middle East, has seen demand.”

Five-year credit default swaps spreads for Turkey, for example, were seen below 270 basis points after testing the 315-bps level, he said.

Latin American bonds put in a positive session on Thursday, with spreads tightening and cash prices moving higher, a New York-based trader said.

For its new deal, Mexico’s Pemex launched a $5 billion three-tranche issue of notes due in 2019, 2021 and 2026, a market source said.

In other deal-related news, China’s HNA Group Co. Ltd. set talk at 9½ for a tap of its 8 1/8% dollar-denominated notes due in 2018, a market source said.

© 2015 Prospect News.
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