Morning Commentary: New Bahrain oil and gas notes trade up; Belarus’ Eurotorg debuts

By Rebecca Melvin

New York, Oct. 19 – Bahrain’s Nogaholding 7½% notes due 2027 traded up in the early going on Thursday after the sovereign priced $1 billion of the notes tighter than initial talk and at a spread of 516.2 basis points over U.S. Treasuries.

The new Nogaholding notes were seen at 101.85 bid, 101.95 offered last, a London-based trader said.

That pricing moved the new bonds into territory which MUFG analyst Trieu Pham highlighted as fair value, indicating a Z-spread of 470 bps to 495 bps.

Elsewhere, Belarus supermarket operator Eurotorg LLC priced $350 million of 8¾% five-year eurobonds at par with a yield spread of mid-swaps plus 668 bps.

The bonds were the first-ever placed by a Belarusian corporate issuer in the international capital markets, and the order book was several times oversubscribed with investors from Asia, Europe, the United States and Russia.

According to Eurotorg CEO Andrei Zubkou in a news release, the Minsk-based company was able to build on the opportunity established by Belarus’ successful sovereign eurobond priced last summer. Zubkou added that he believes the deal opens the market for more high-quality Belarusian issuers and will contribute to the country’s investment environment and economy.

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