Morning Commentary: EM debt primary ticks higher; African Development Bank taps market

By Rebecca Melvin

New York, March 15 – After an uptick in new issuance in emerging markets debt this past week, the space was ending on a strong note on Friday, with investors expecting further issuance amid improved market conditions even as news from central banks is expected next week, according to sources.

The secondary market was seeing firm pricing, with the iShares JPMorgan, U.S. dollar emerging markets bond ETF up another 0.5 point in the early going and higher by 0.34 point last at 108.94. The ETF seeks investment results that correspond to the price and yield of the JPMorgan emerging markets bond index.

Meanwhile, African Development Bank joined the list of this week’s issuers, with the Abidjan, Ivory Coast-based multilateral development bank pricing €1 billion of ½% notes due 2029 at 99.447 for a yield of 0.557%.

On Thursday, EM-focused Millicom International Cellular SA priced an upsized $750 million issue of 10-year senior notes at par to yield 6¼%, and Banco do Brasil SA priced $750 million of five-year notes to 4¾%. On Wednesday Petroleo Brasileiro SA priced $3 billion of notes in two tranches.

There was an expectation that Gulf Cooperation Countries will follow on Emirates NBD Bank PJSC’s $1 billion for additional tier 1 securities this week as this debt security offers attractive pricing for issuers.

Also next week, investors will be watching for updates from the U.S. Federal Reserve on Wednesday and from the Bank of England on Thursday. Both banks are expected to hold rates steady following their respective policy meetings.

© 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.