Emerging markets quiet due to holidays; Asian sovereigns up ¼ point; new issues unchanged

By Paul A. Harris and Aleesia Forni

Columbus, Ohio, April 30 - Trading was quiet on Monday due to May Day-related holidays in Tokyo, China, Russia, Hungary and Argentina, a London-based trader said mid-morning U.K.-time.

Asian sovereigns were up to ¼ point higher following good real money demand on Friday for Indonesian assets.

New issues were more or less unchanged, but the recent slide seems to be coming to an end as accounts add risk, which makes the Street supportive.

Asian high-yield corporates were up on light flows. Most of the buying was concentrated in Chinese property benchmark issues, which were up about ½ point on the day.

There was also some buying of Chinese industrials, the source added.

The Markit iTraxx SovX CEEMEA index, which tracks Central and Eastern Europe, the Middle East and Africa credit default swaps, was 2 basis points wider on the day and sat at 287 bps during Monday's London session.

PDVSA notes climb

One trader said that there was "huge size" in Petroleos de Venezuela SA's 9% notes due 2021, which moved up to 82½ bid, 83 offered from an 80-81 context at the end of last week, "so those were up a little bit" on volume of $55 million.

He said of the Venezuelan state-run oil monopoly: "We saw it starting to pick up last week."

The trader saw the PDVSA 5¼% notes due 2017 up 1½ points, finishing at 79 bid, 79½ offered, "so that seemed like it bounced and on good size" of about $22 million traded.

"A few of the other issues traded actively - about $10 million or $20 million," he said.

These included the 8½% notes due 2017, which he said were "up a couple" of points to 90 bid, 90½ offered, on volume of $25 million to $39 million.

The oil company's 5 3/8% notes due 2027 gained three-quarters of a point to end at 62 bid, 62½ offered, he said, on volume of about $10 million.

Gazprombank near re-offer

In the Russian space, Gazprombank's recent issue seems to have "run out of steam," settling at 100¾ bid near the end of London's session.

The deal had tightened 15 bps earlier in the day, which is particularly impressive given the lackluster performance of other recent bank deals, a market source commented.

The Moscow-based lender priced a $500 million issue of 7¼% notes due 2019 at par, or mid-swaps plus 567 bps, on Friday.

Global Bank eyes deal

In the primary, Panama's Global Bank (Ba1/BB+) could price a $200 million five-year covered bond offering (Baa3/BBB-) as early as Wednesday, according to a market source.

There is a minimum overcollateralization requirement of 18½%, the source added.

Deutsche Bank is the bookrunner for the Regulation S and Rule 144A deal, and HSBC is co-manager.

Global Bank is based in Panama City.

© 2015 Prospect News.
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