EM debt drags, but MENA primary active; Tunisia prices €500 million notes; Oman on deck

By Rebecca Melvin

New York, Oct. 24 – Emerging markets debt was pulled lower with the broader markets on Wednesday as worries about global growth buffeted U.S. stocks and sent the CBOE Volatility index up 22% on the day to 25.23. But activity in the emerging markets debt primary market remained strong.

Tunisia launched and priced €500 million of 6¾% five-year notes on Wednesday following a series of fixed-income investor meetings. The notes priced to yield 7%, which was at the tight end of guidance in the 7 1/8% area and initial talk in the low 7% area.

Orders for the deal were in excess of €900 million at the time guidance was released.

Citigroup, Deutsche Bank, JPMorgan and Natixis are bookrunners for the Rule 144A and Regulation S notes.

Also in the Middle East and Africa region, the government of Oman was readying to price a U.S. dollar-denominated seven-year sukuk, which was talked to yield mid-swaps plus 285 basis points. And Abu Dhabi’s National Central Cooling Co. PJSC, or Tabreed, announced that it was planning to price $500 million of seven-year senior unsecured sukuk certificates.

J.P. Morgan Securities plc is bookrunner for the Regulation S notes, which are expected to be listed on the Irish exchange.

Announcing a new deal that will go on the road was Bahrain’s Oil & Gas Holding Co. BSC, or Nogaholding, The oil and gas investment and development arm has mandated banks and scheduled fixed-income investor meetings for a proposed U.S. dollar-denominated benchmark offering of six- and/or 10-year notes.

BNP Paribas, Citigroup, and JPMorgan are joint global coordinators, and Bank ABC, Gulf International Bank, HSCB, National Bank of Bahrain, Societe Generale and Standard Chartered Bank are joint lead managers for the Rule 144A and Regulation S notes.

From Asia, Korea Housing Finance Corp. said it plans to sell €500 million of covered bonds due Oct. 30, 2023, with a yield in the mid-swaps plus 50 bps area, according to a syndicate source on Wednesday.

BNP Paribas (billing and delivery), DBS Bank Ltd. ING and Societe Generale are joint lead managers for the Rule 144A and Regulation S securities.

The housing finance company is based in Seoul, South Korea.

The Latin America primary market was quiet, while trading in the LatAm secondary was ‘”treading water.” Most of the region’s credits have been under pressure since U.S. Treasuries began to rally in recent days, a New York-based market source said. But overall volumes were low.

Argentina was under pressure as were some other markets including Venezuela.

In the broader markets, U.S. stocks suffered a downdraft, with the Dow Jones industrial average and S&P 500 stock index turning negative for the year, while high yield spreads widened out.

Causing the risk-off sentiment is a heightened sense of uncertainty about global growth, including growth for China, which has seen its stock market fall by 30% so far this year.

The Dow fell more than 608 points, or 2.4%, to 24,583.42. The S&P 500 stock index lost 84.59 points, or 3.1% to 2,656.10. And the Nasdaq stock market lost 329.14 points, or 4.4% to 7,108.40 on Wednesday.

The barrel price of West Texas Intermediate crude for December 2018 delivery slipped only another 0.6% to $66.44 on Wednesday after dropping 4.4% on Tuesday.

© 2015 Prospect News.
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