Primary sees NongHyup, China Construction; Russian corporates perk up; Burgan sets talk

By Christine Van Dusen

Atlanta, Sept. 22 – Korea’s NongHyup Bank and China Construction Bank Corp. were among the issuers to print notes on Monday as bonds from the Middle East and Russia improved and other emerging markets assets weakened.

“[Emerging markets] is generally a little weaker this morning, affected by weakness in Asia, driven by comments from the Chinese Finance Minister that the government’s economic stimulus may be limited,” a London-based analyst said. “However, we are seeing better performance from Russian corporates, helped by various positive headlines over the weekend.”

He pointed to the news that the Ukraine government and pro-Russia rebels agreed to a memorandum on a peace plan, a move that should help to prolong the cease fire.

“Elsewhere in [emerging markets], Turkey credit default swaps spreads are one basis point wider,” he said. “Central and emerging Europe are largely unchanged.”

Looking to the Middle East, the relative stability in rates helped most bonds start off on solid footing on Monday, a London-based trader said.

“Demand, out of the gate,” he said. “Perpetuals were strong, up nearly a point, as some money was put to work.”

He was particularly interested in the revived deal planned by Kuwait’s Burgan Bank SAK, which on Monday set initial talk in the low- to mid-7% area for a benchmark-sized issue of dollar-denominated notes that is expected to price on Tuesday.

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