A distinct window of opportunity for new issuance opened on Wednesday and Thursday this week, but not a single emerging market borrower was brave or nimble enough to exploit it.
Turkey, which has been rumoured for the past fortnight to be planning its second visit to the international capital markets for 2008 failed to exploit the favourable conditions sparked by surprisingly good retail sales figures out of the US.
Bankpozitif, the BB rated Turkish subsidiary of Israel’s Hapoalim, demonstrated the value of retail demand when it priced $150m of five year bonds at an impressively tight 7.1% - inside its own curve.
However, in Latin America, the bleak mood continued when Brazilian oil major Petrobras, the region’s most prolific corporate borrower, postponed the $500m tap of its 2016 bonds after failing to attract enough investors.
The decision to pull the deal – which many regarded as priced too tightly – sparked fears that the region’s borrowers were intransigently ignoring the new market paradigm and insisting on unachievable pricing.
In Asia, Kexim, the Export-Import bank of Korea, was forced to shelve plans for a Malaysian ringgit bond.
Bankers and investors are unanimous: if emerging market borrowers want to get deals done, they will have to swallow their pride and, like their Western European and US counterparts, pay the new issue premia investors are demanding.