Market eyes new deals from Poland, EDB and QNB as spreads remain firm; Koc joins calendar

By Rebecca Melvin

New York, Feb. 28 – Emerging markets were firm on Thursday with several new issues priced and spreads overall performing well amid net market buying into month-end, according to market sources.

The Republic of Poland launched and priced €2 billion of 10-year and 30-year green bonds, with spreads tightening about 10 basis points between initial price talk and final terms.

Poland’s €1.5 billion of 1% notes due 2029 priced at 99.462 to yield 1.057%, or a yield spread of mid-swaps plus 35 bps And a sister tranche of €500 million of 2% notes due 2049 priced at 98.425 to yield 2.071%, or a yield spread of mid-swaps plus 77 bps.

Order books at the time price guidance was released stood at about €3.1 billion for the 10-year tranche and about €1.3 billion for the 30-year notes.

Spread tightening for this week’s deals from the Middle East has been more dramatic.

Emirates Development Bank PJSC’s $750 million of 3.516% five-year notes saw yield spread drop 32 bps during pricing to 98 bps. The notes, which priced under the financial services firm’s €3 billion medium-term note program, represented a debut offering.

Also in the primary market, Turkey’s QNB Finansbank AS launched a $500 million offering of 5˝-year senior notes to yield 6.95%. That deal was expected to price later in the session, but final terms were not heard by Prospect News’ deadline.

The deal launched at the tight end of earlier talk for a yield of 7%, plus or minus five bps.

Order books stood at $1.4 billion ahead of the U.S. markets’ open. And the offering was made under the bank’s $5 billion global medium-term note program.

Ankara-based QNB Finansbank is a private commercial bank, which is nearly 100% owned by Qatar National Bank.

Meanwhile, Istanbul-based Koc Holding AS announced plans for a new offering of five-year to seven-year dollar-denominated notes of benchmark size.

Turkey’s largest industrial conglomerate selected Bank of America, Citigroup and JPMorgan to arrange fixed-income investor meetings for the Regulation S and Rule 144A deal starting on Friday.

There were mixed signals on U.S.-China trade on the last trading day of February, which held stocks down. And U.S. Treasuries were lower after new GDP data showed that fourth quarter growth slowed but not by as much as expected. The Commerce Department reported that GDP rose by 2.6%, which was better than the 2.3% increase many were expecting. The yield on the benchmark 10-year Treasury note bumped up to 2.724%, a gain of 3.1 bps on the day.

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