Primary sees BTG Pactual, Ghana, Icici, UT Capital; Russian bonds unhurt by new EU sanctions

By Christine Van Dusen

Atlanta, Sept. 11 – Brazil’s Banco BTG Pactual, Ghana, India’s Icici Bank Ltd. and China’s UT Capital Group sold notes on Thursday as the European Union announced plans to implement new sanctions against Russia for the sovereign’s actions in Ukraine.

“State Russian banks will not be able to access loans, but bond financing has already been banned – and banks were hardly keen to issue loans anyway – so this shouldn’t have much of an impact on spreads,” a trader said.

On Thursday morning, Russian credit default swaps spreads tightened by 3 basis points as most quasi-sovereign bonds performed well, a London-based analyst said.

“We have seen particular demand of the 2022 to 2023 area, likely driven by short covering,” he said.

Also impacting market sentiment on Thursday was speculation that Russia has sent less gas to Poland in retaliation for the latter sovereign’s gas exports into Ukraine.

“[OAO Gazprom] claimed it was likely due to a technical fault or maintenance work,” the analyst said.

“Gazprom bonds have widened anywhere from 60 bps to 187 bps since the United States’ first sanctions Rosneft and Novatek,” the analyst said. “The euro bonds have been particularly badly hit, with the euro 2017s 187 bps wider.”

Among Gazprom’s dollar-denominated notes, the 2015s and 2016 have suffered the most, he said.

In other trading on Thursday morning, bonds from Turkey improved while sellers emerged for GarantiBank International NV.

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