Thursday, 27 May 2010
Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, and Malaysia are among issuers delaying bond sales as Europe’s debt crisis sent emerging market borrowing costs to near their highest since September.
Sabic Capital, a unit of Sabic, delayed its offer because the spreads were “not what we wanted,” Chief Financial Officer Mutlaq Al-Morished said in a telephone interview today. Malaysia postponed making a decision on the size and timing of its first sale of Islamic bonds in eight years due to unstable market conditions, said two people with direct knowledge of the plan. Bahrain-based retail lender BBK also delayed a bond sale, said a banker familiar with the plan.
Emerging-market assets have slumped this month as the debt crisis in the European Union fueled concern the global economic recovery will stall. The extra yield investors demand to hold debt of developing nations over U.S. Treasuries widened 71 basis points in May to 336 basis points today, according to JPMorgan Chase & Co.’s EMBI+ Index. The spread reached 354.7 basis points yesterday, the highest since Sept. 11.