Spreads recoup some of Monday’s move as buyers step in; deal for First Abu Dhabi on hold

By Rebecca Melvin

New York, Feb. 6 – Emerging markets bond spreads tightened back in somewhat on Tuesday after a swift move wider on Monday in tandem with a steep selloff in U.S. stocks.

The market remained volatile in tandem with the broader markets on Tuesday, but there were better sellers than buyers in the market, a New York-based market source said.

The primary markets were pretty much quiet. First Abu Dhabi Bank’s planned five-year dollar-denominated Islamic bond was on hold as the issuer was “monitoring the markets,” a market source said.

The United Arab Emirates lender planned to issue a five-year note following meetings in London on Monday.

But Corporacion Andina de Fomento priced €1 billion of seven-year senior notes at mid-swaps plus 40 basis points despite the market headwinds, according to a market source. The source added, “I can’t imagine someone going out with the sudden increase in volatility.”

Tuesday’s session was marked by swings with no discernible trends. The S&P 500 stock index traded up 46.20 points, or 1.7%, to 2,695.14 after dropping 5% on Monday. Meanwhile, the CBOE Volatility index, which fell 20% after surging 115.6% on Monday, remained elevated.

The emerging markets bond market “held in well. There was a gain similar to stocks,” a New York-based market source said Tuesday.

© 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.