Deals from Indonesia, Russian Standard; Poland, Qatar bonds perform; Turkish notes falter

By Christine Van Dusen

Atlanta, July 10 - Indonesia and JSC Russian Standard Bank printed notes and Russian corporate issuers lined up new deals on Wednesday as Standard & Poor's downgrade of Italy - along with the International Monetary Fund's reduced global economic forecast - impacted investor sentiment.

"Turkey is underperforming the rest of the market, with sovereign cash 10 basis points wider and credit default swaps 5 bps wider," a London-based analyst said.

Turkish corporates also faltered on Wednesday, with bank bonds moving 5 bps to 10 bps wider, she said.

"Russian corporates are generally flat," she said.

But Moscow-based steel producer Evraz Group SA's 2017s were wider on Tuesday, on news that the company has been charged a penalty for underpaying taxes between 2007 and 2012.

"The amount has been reported to be as high as RUB 20 billion or $600 million," the analyst said. "This, of course, is unexpected and will cause a substantial negative sentiment and volatility in the bonds until the issue is resolved. It is still unclear whether this is the final decision and what the timing of such a payment will be."

Meanwhile, bonds from Poland were tighter on Wednesday, with buyers from Asia.

The Markit iTraxx SovX CEEME ex-EU index opened on Tuesday at 243 bps over Treasuries, wider by 5 bps. But the Markit iTraxx Crossover index spread - seen Monday at 446 bps - moved in Tuesday, to 439 bps.

In trading from the Middle East, bonds on the long end of Qatar's sovereign curve started the session about 7 bps to 9 bps tighter, a trader said.

"Not much support for Sharjah Islamic Bank's 2018s," he said. "They're 35 bps wider on the month now."

Nigeria notes remain active

Nigeria's recent issue of 5 1/8% notes due 2018 that priced at 98.917 traded Wednesday at 99.120 bid, 99.870 offered, a trader said.

The sovereign's second tranche - $500 million 6¾% notes due 2023 that came to the market at 98.193 - was quoted Wednesday at 99.120 bid, 99.870 offered.

The proceeds will be used to finance infrastructure investments.

Egypt in focus

Egypt remained in focus on Wednesday as Fitch Ratings downgraded the long-term foreign currency issuer default ratings of National Bank of Egypt to B- from B.

The downgrade reflects the July 5 downgrade of the sovereign's ratings.

On Wednesday Egypt's 2020 bonds moved up to 85.62 bid, 988.62 offered after Tuesday's levels of 82 bid, 85 offered.

The sovereign's 2040s were seen Wednesday at 76.12 bid, 80.12 offered. On Tuesday the notes were spotted at 73¼ bid, 77¼ offered.

Indonesia sells bonds

In its new deal, Indonesia printed a $1 billion issue of 5 3/8% notes due 2023 at 99.391 to yield 5.45%, a market source said.

Barclays, JPMorgan and Standard Chartered were the bookrunners for the Rule 144A and Regulation S deal.

RSB does deal

Russian Standard Bank priced $200 million 11½% notes due 2024 at par to yield 11½%, a market source said.

Goldman Sachs and HSBC were the bookrunners for the Regulation S-only deal.

The notes were talked at a yield in the 11½% area.

The Moscow-based lender recently postponed a similar issue - via Goldman Sachs and HSBC - in May. Those notes were talked in the 10% area.

Gazprom sets roadshow

Russia's OJSC Gazprom will set out on July 15 for a roadshow to market a sterling-denominated issue of notes, a market source said.

BofA Merrill Lynch, Deutsche Bank, Gazprombank and JPMorgan are the bookrunners for the Regulation S deal.

The roadshow will be held in London and Edinburgh and will conclude on July 16.

Gazprom is a Moscow-based gas company.

Ukraine prices rise

In trading from Ukraine, bonds so far this week have seen higher prices, with corporates outperforming sovereign notes, said Svitlana Rusakova of Dragon Capital.

NJSC Naftogaz of Ukraine saw its notes hold in the 99 to 100 area, while Ukraine's 2017s traded at about 97 before moving to 99.

"Met with a bit of selling there," she said. "Ukraine 2023s were offered down at 85 but then lifted from there a number of times."

Demand was noted for Metinvest BV's 2015s.

"The 2018s, for pretty much all issues, were also in demand," she said.

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